Stay nimble, OECD tells oil-rich Norway

The same policies that are accommodating growth may be causing some segments like housing to overheat, a country survey found.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Dec. 19, 2017 at 8:17 AM
share with facebook
share with twitter
| License Photo

Dec. 19 (UPI) -- Norwegian economic planners have so far managed growth effectively, though moving away from oil is just one of the areas for improvement, the OECD said.

A survey from regional contracts for Norge Bank, the country's central bank, said growth for the Norwegian economy was moderate over the last three months and expected to remain that way into the middle of next year. A country survey from the Organization of Economic Development and Cooperation said a monetary policy of growth is also overheating the housing and debt markets, however.

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. In its survey, the OECD said Norwegian economic planners should come up with a plan to adjust to a "possible hard landing" in the housing and debt markets.

OECD Deputy Secretary-General Mari Kiviniemi said Norway enjoys some of the highest living standards in the world, but it's not just because it's one of the world's leading oil producers.

"Norway has a very well-managed economy," she said in a statement. "The challenge going forward is to continue with public policies that ensure inclusive growth for future generations."

GDP growth for Norway should be just above 2 percent through 2019, though the OECD said a pressure valve could be added through reforms that move the economy away from oil-related activities.

Norge Bank in November recommended that the Ministry of Finance remove oil and gas stocks from the benchmark Government Pension Fund Global, arguing it would make government wealth less exposed to a "permanent drop in oil and gas prices."

The government owns shares in oil and gas major Statoil. The company reported adjusted earnings after tax for the third quarter at $2.3 billion, more than double the amount from the same period last year.

The OECD said a dynamic business sector and well-managed oil and gas wealth means Norway enjoys one of the highest levels of GDP per capita in the world, though managers need to stay nimble, especially amid concerns about a housing market correction.

"Maintaining these high standards of well-being, seizing opportunities from automation and globalization and overcoming challenges from long-term decline in oil and gas production, requires ensuring that policies remain at the forefront of good practice," the survey read.

Related UPI Stories
Trending Stories