Economic transition period for oil revenue is over, Norway says

March 2 (UPI) -- The target rate of inflation in the Norwegian economy was lowered because a transition period of phasing in oil revenues is over, the government announced.

The Norwegian Ministry of Finance announced it was revising its monetary policies as they relate to inflation.

"Inflation targeting shall be forward-looking and flexible so that it can contribute to high and stable output and employment and to counteracting the build-up of financial imbalances," the regulation reads.

Regulation from the start of the new century called for a monetary policy that contributed only to stable developments and the ministry said updated guidance builds on lessons learned over the past two decades.

When the initial inflation target rate of 2.5 percent was introduced, Norway was just phasing oil revenue into its economy. Now, the ministry said, that period is over.

"A key argument for maintaining a higher inflation target than other countries is therefore no longer relevant," the ministry stated. "Against this background, the inflation target for Norway is now set at 2 percent, in line with that prevailing in comparable countries."

Norway is one of the world's leading oil and gas producers and sends nearly all of its production from offshore to the European market, making it the region's top supplier after Russia.

Norge Bank, the country's central bank, said growth for the Norwegian economy was moderate and expected to remain that way into the middle of next year. In a fourth quarter survey, the government said mainland growth in gross domestic product was just under 2 percent, a level indicative of healthy growth, for the last three quarters.

Norge Bank Gov. Øystein Olsen has said that oil and gas has provided a "substantial boost" to Norwegian incomes. On the ministry's inflation target, Olsen said Friday that it would not "result in significant changes in the conduct of monetary policy."

GDP growth for Norway should be just above 2 percent through 2019. Statistics Norway, the government's record-keeping agency, reported that prices for mining support servicing, including those related to extraction, grew 9.2 percent from December.

The Norwegian Petroleum Directorate, the nation's energy regulator, reported a preliminary rate for January production of 1.6 million barrels per day on average, an increase of 5 percent, or 77,000 barrels per day, from December. Total gas production of 12.9 billion cubic feet per day was an increase of 2.2 percent from the previous month.

The NPD on Friday confirmed that Aker BP found oil while drilling a wildcat well, one tapping an area not previously known to contain reserves. The North Sea discovery is estimated to hold between 30 million and 60 million barrels of recoverable oil.