www.oecd.org/eco/surveys/economic-survey-norway.htm
OECD ECONOMIC SURVEY OF
NORWAY
Thriving in a changing worldOslo, Tuesday 19 December 2017
OECD
OECD Economics
Norway’s GDP per capita remains impressive
2Source: OECD National Accounts database, and OECD Analytical Database.
GDP per capita, constant USD prices, 2010 PPP
0
10
20
30
40
50
60
70
0
10
20
30
40
50
60
70
1970 72 74 76 78 80 82 84 86 88 90 92 94 96 98 2000 2 4 6 8 10 12 14 16
Th
ou
san
ds
OECD Norway Norway (Mainland)
Thousand Thousand
Inequality is low
3
1. The Gini coefficient ranges from zero to 1, zero indicating all individuals have the same income; 1
indicating one individual receives all income.
Source: OECD Income Distribution Database (IDD).
0.20
0.25
0.30
0.35
0.40
0.45
0.50
NOR SWE DNK DEU FIN FRA OECD
Inequality (Gini coefficient)¹ of market incomeand disposable (net) income
Inequality of market income Inequality of disposable income
OECD Gini index, market income OECD Gini index, disposable income
Employment is a key driver of low inequality and
high well-being
4
0
5
10
15
20
25
DNK NOR FRA SWE DEU FIN EU28
Gender wage gap2015 or latest available
% of male median wage
Real GDP growth is picking up
5Source: OECD Analytical Database; Norges Bank.
-4
-2
0
2
4
6
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Real GDP growth (mainland)
Real GDP (Mainland)
Y-o-Y % change
Labour costs remain high
6
80
100
120
140
160
180
200
220
80
100
120
140
160
180
200
220
2000 2002 2004 2006 2008 2010 2012 2014 2016
Index 2000 = 100Index 2000 = 100
Cost-competitivenessEuro-denominated unit labour cost index
Denmark Norway (Mainland) Sweden
Source: OECD Analytical database, and OECD Economic Outlook database.
Productivity has slowed
7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2000 2002 2004 2006 2008 2010 2012 2014 2016
% change% change
Trend in real labour productivity growthPer hour worked
Norway (mainland) OECD
Source: OECD Analytical database, and OECD Economic Outlook database.
Maintaining macroeconomic and
financial stability
8
Inflation remains well anchored
9
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
%
Long term CPI growth and expectations
Expected inflation 2 years ahead CPI 10-year m.a, annual change
Source: Norges Bank ; OECD analytical database.
Adjustment of the fiscal rule implies an end to
fiscal expansion
10
0
1
2
3
4
5
6
7
8
9
2000 2004 2008 2012 2016 2020 2024
Structural non-oil deficit 3 percent path
% of trend mainland GDP
Source: Ministry of Finance.
Recommendations for macroeconomic policy
1. Normalise the monetary stance as forecast, with rate increases starting in late 2018
2. Focus on restraint in government spending and public-service efficiency in light of the adjusted fiscal rule
11
Household debt remains high
12
100
120
140
160
180
200
220
240
260
100
120
140
160
180
200
220
240
260
2000 2002 2004 2006 2008 2010 2012 2014 2016
Household debt and house prices
Household debt (left) Real house price (right)
% of disposable income Index 2000 = 100
Source: Statistics Norway; Norges Bank ; and OECD Analytical database.
House prices have fallen in recent months,
especially in Oslo
13
Source: Statistic Norway; and Real Estate Norway (Eiendom Norge).
90
100
110
120
130
140
150
90
100
110
120
130
140
150
2014 2015 2016 2017
Index 2014 = 100Index 2014 = 100
Oslo including Bærum (quaterly, existing dwellings)
Norway (monthly)
Recommendation regarding the housing market
• Be prepared to respond to a hard landing in the
housing and debt markets. This should include, as
necessary, delay to monetary policy normalization and the introduction of targeted fiscal policy
14
Improving business policies
15
Norwegian business operates in a high cost
environment
16Source: Eurostat.
Hourly labour costs, 2016
0
10
20
30
40
50
60
0
10
20
30
40
50
60
POL ESP GBR ITA EA19 DEU FIN FRA SWE DNK NOR
EUREUR
There is room to improve regulation
17
0.0
0.5
1.0
1.5
2.0
2.5
3.0
NLD
GB
R
AU
T
DN
K
NZ
L
AU
S
DE
U
SV
K
ITA
ES
T
FIN
PR
T
HU
N
BE
L
CZ
E
JAP
CA
N
ES
P
IRL
LUX
NO
R
FR
A
OE
CD
ISL
CH
E
CH
L
SW
E
US
A
LVA
PO
L
SV
N
GR
C
KO
R
ME
X
ISR
TU
R
OECD Product Market Regulation (PMR) indicator, 2013Scale 0-6 from least to most restrictive
Source: OECD Product Market Regulation Database.
Recommendations for maintaining a successful
business sector
1. Complete the programme of income-tax rate cuts and consider further reductions
2. Continue strengthening competition policy
3. Reduce state stakes in business further
4. Strengthen routes to recovery in the insolvency regime
5. Replace the taxi-licencing system
18
Strengthening skills, encouraging
employment
19
Scores in mathematics and science remain
middle-ranking
20
410
430
450
470
490
510
530
550
2000 2003 2006 2009 2012 2015
B. Mathematics
410
430
450
470
490
510
530
550
2000 2003 2006 2009 2012 2015
A. ReadingAverage PISA score
410
430
450
470
490
510
530
550
2000 2003 2006 2009 2012 2015
C. Sciences
Norway OECDTop 3 OECD Bottom 3 OECD
Source: OECD PISA 2000-2015 Databases.
Recipiency of Disability Benefit remains an issue
21
0.0
0.5
1.0
1.5
2.0
2.5
2008 2017
A. Age 18-34
0
5
10
15
20
25
30
35
40
2008 2017
B. Age 50-67
People on Disability Benefit, % of age category
Source: Norwegian Labour and Welfare Administration (NAV).
Recommendations for maintaining a successful
business sector
1. Raise employer awareness about the incentives to offer apprenticeship places
2. Strengthen employers’ incentives to offer apprenticeship places by reducing apprentice wages or increasing subsidies
3. Press on with reform to sick leave and disability benefit including through a longer employer-financed phase of sick leave and tighter medical
assessment
22
Improving investment in transport
infrastructure
23
Norway invests heavily in transport infrastructure
24
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2000 2005 2010 2015
% of GDP% of GDP
General Government investment in transport
Denmark Norway (Mainland) Sweden
Source: OECD National Accounts database.
Major road projects initiated in the period 2014-17
25
Corridor
Number
of
projects
Net
benefit
(NOK
million)
Cost (NOK
million)
Net Benefit to
Cost ratio
1. Oslo-Svinesund-Kornsjø 1 −860 1830 −0.47
2. Oslo-Ørje/Magnor 2 −1790 4750 −0.38
3. Oslo-Grenland-Kristiansand-Stavanger 7 12080 33890 +0.36
4. Stavanger-Bergen-Ålesund-Trondheim 4 18020 26800 +0.67
5. Oslo-Bergen/Haugesund. Branch via Sogn to Florø 4 −2320 8950 −0.26
6. Oslo-Trondheim. Branches to Måløy, Ålesund, and Kristiansund 3 5210 6500 +0.80
7. Trondheim-Bodø. Branches to the Swedish border 2 −1740 5670 −0.31
8. Bodø-Narvik-Tromsø-Kirkenes. Branches to Lofoten and the
national border2 −530 1890 −0.28
Source: Sager (2016).
Recommendations for maintaining a successful
business sector
1. Strengthen the influence of cost-benefit analysis in project selection
2. Improve checks against cost inflation after projects are selected
26
More Information…
www.oecd.org/eco/surveys/economic-survey-norway.htm
OECD
OECD Economics
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without
prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers
and boundaries and to the name of any territory, city or area.
27
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