Norway remains among the world’s most prosperous and equal societies, but slowing productivity growth and rising public spending are weighing on the economy and long-term fiscal sustainability. To tackle these challenges, Norway should improve public finances, cut red tape for businesses and strengthen the quality of the education system, according to the OECD Economic Survey of Norway.
Total GDP growth is expected at 1.3% in 2026 and 1.2% in 2027, after growth of 1.1% in 2025. Average annual inflation is projected to increase slightly from 3.0% in 2025 to 3.1% in 2026 before declining to 2.3% in 2027.
“Norway’s GDP per capita, incomes and living standards are among the highest in the OECD, supported by strong institutions, sound economic management and a highly skilled workforce,” OECD Director of Country Studies Luiz de Mello said, presenting the Survey in Oslo alongside Norway’s Minister of Finance Jens Stoltenberg. “Preserving these achievements will require careful management of public finances, including through a medium-term expenditure plan. To boost productivity and expand opportunities, Norway should lower regulatory barriers to business activity and strengthen foundational skills in education.”
Public spending as a share of GDP has risen over the past two decades to reach 60%, the highest in the OECD. Complementing the fiscal framework with a medium-term expenditure plan could help reduce spending pressures and maintain long-term sustainability of public finances.
Reforming the sickness and disability system could raise employment and reduce its high costs. Such a reform should enhance early intervention and independent medical assessments and lower benefit rates. A comprehensive reform to reduce taxation of labour and capital, while increasing taxes on inheritance and property, is needed.
Productivity growth has been declining over the past two decades to below the OECD average. Regulatory policy reforms would spur business dynamism, innovation and investment. Reducing administrative burdens for start-ups, strengthening regulatory reviews and making insolvency regimes more effective would be key measures.
Despite high spending, educational performance has declined over the past decade. Policy priorities include raising teaching quality, adapting teaching to individual student needs and strengthening testing. Streamlining the curriculum and enforcing digital device bans would also improve the performance of primary and lower secondary education.
As an exporter of key commodities, Norway is less exposed to the risks of global supply chain disruptions than most OECD countries. The share of trade in value added with non-European countries is rising, including with countries with whom Norway has no free-trade agreement. Deepening trade relations further, improving risk management and maintaining sufficient inventories of essential goods will mitigate risks of global supply chain disruptions.
See the Overview of the Economic Survey of Norway with key findings and charts (this link can be used in media articles).
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