The Norwegian economy continues to perform well, despite low oil prices, a testimony to policies that insulate the country from volatile petroleum markets. Output growth is recovering, well-being remains high in many dimensions, and Norway stands as one of the OECD’s most inclusive countries in terms of income equality, labour participation and gender gaps. Accommodative monetary policy continues to support demand but has fuelled worryingly strong house-price increases and credit growth. House prices now appear overvalued and seem to have peaked. A rapid price correction could have severe effects on households’ balance sheets, banks’ financial health, and could be critical to Norway’s economic outlook.