IMF presents its views on the Norwegian economy

Today a mission from the International Monetary Fund (IMF) presented its views on the Norwegian economy and Norwegian economic policy. The mission is in Oslo as part of its article IV-consultation with Norway.

"I am pleased that the IMF broadly supports the economic policies implemented by the Norwegian government. The mission’s statement is an important contribution to our domestic debate on economic policies”, says Finance Minister Sigbjørn Johnsen.

 

The IMF concludes that the Norwegian economy continues to perform well amidst a turbulent global economy.  Output is now higher than before the financial crisis in 2008 and unemployment remains low. Looking ahead, the IMF mission expects the moderately paced growth in the mainland economy to continue, driven mainly by domestic demand. The statement emphasizes that Norway is better placed than many in Europe to weather an intensification of eurozone stress. The Norwegian economy is nevertheless vulnerable to loss in confidence, lower export demand, reduced oil prices, and to strains in the international market for bank financing.

 

"Norway cannot insulate itself from what is happening abroad. The best protection is to keep our own house in order. I agree with the IMF that a tight fiscal stance will protect our competitiveness, and allow monetary policy to be our first line of defense if international conditions worsen, " says Sigbjørn Johnsen.

 

In the statement, the IMF highlights the risks stemming from high household debt and elevated house prices. The mission argues that macroprudential policies should be employed to reduce these risks, and points to i.a. the Financial Supervisory Authority’s guidelines for mortgages, higher risk weights for bank’s mortgage portfolios, and strengthening of bank capital through restraining dividends and remuneration. The mission also gives advice on how the institutional framework for macroprudential policy may be organized in Norway.

 

"It is important to strengthen the surveillance of the whole financial system to promote financial stability. The Ministry of Finance aims to formalize Norway’s framework for macroprudential policies by mid-2012", says Sigbjørn Johnsen.

 

The mission finds the broadly neutral fiscal stance in the 2012 budget proposal appropriate, given heightened global risks and conditional on macroprudential tightening. The IMF also notes that Norway faces long run fiscal challenges, due to increasing spending on healthcare, as well as age and disability pensions. This underlines the need for further entitlement reforms aimed at bolstering employment.

 

In the coming months, the IMF staff will complete a more extensive report on the Norwegian economy and economic policy that will be presented to the IMF’s Executive Board.

Related news

Latest news

USCG confirms OPtimarin in Line for Ballast Water Approval

The United States Coast Guard (USCG) has confirmed that Norwegian ballast water treatment specialist Optimarin has become the first supplier to submit an application for type approval.

New order for Servogear

Servogear announces that they have received a new order from Brødrene Aa. 

Norwater AS reports boost in sales

The Norwater team reports of great interest and busy days in 2016. In a press release, they state that as of the first 8 months of the year, 2016 sales are already beyond target for the year as a whole.

Gaia-facts reaching ground control

The European Space Agency (ESA) has released the first data from the Gaia mission, which has the tremendous task of building the most precise 3D map of the Milky Way.

Polish delegation for Norwegian circular waste management

Against the background of the EU's ambitious waste management targets, Norwegian and Polish stakeholders met on Wednesday 14 September in Drammen.

Milestone at Mongstad Water Treatment Plant

SAR AS reports that an extensive upgrade to the water treatment plant at Mongstad reached a new milestone July. 

Servogear signs new contract with Özata Shipyard

Servogear has announced the signing of a new contract with Özata Shipyard in Turkey. The contract includes the delivery of Servogear Ecoflow PropulsorTMfor two 39 meter passenger catamarans (YN 41 & YN 42).

Statoil and Petrobras strengthen strategic partnership

Statoil reports that they have strengthened their cooperation in Brazil by signing a Memorandum of Understanding (MoU) with Petrobras.

TechInvent and Island Offshore/Centrica announced winners of ONS Innovation Award

TechInvent and Island Offshore/Centrica were announced winners of the ONS 2016 Innovation Awards, at the Innovation Awards Ceremony Tuesday 30 August.