In its outlook, Statistics Norway (SSB) states that the Norwegian economy continues to defy the bleak global economy, and that activity growth is expected to remain reasonably high for the foreseeable future.
SSB says low interest rates and high demand in the petroleum industry are the key drivers behind the upturn in the Norwegian economy, which began at the start of 2011.
Low international interest rates stemming from the weak global economic situation, in addition to a strong krone, low inflation and moderate pressure in the labour market have resulted in a very low base rate in Norway.
Together with increased confidence in the interest rate market, this has led to the money market rate falling more than 1 percentage point in the course of a year, reaching 1.9 per cent at the start of December. This level is expected to remain roughly the same throughout 2013. Mortgage rates follow the money market rate to a large extent with a time lag.
According to SSB's calculations, a floor will be reached at the end of 2013 that is around 0.25 percentage points lower than the current level. The base rate is expected to gradually rise through 2014 and 2015, and the money market rate will reach at least 4 per cent by the end of 2015, when mortgages rates are expected to exceed 5 per cent.
High growth in real wages, employment and transfers will lead to a clear increase in households’ real incomes in 2012 and the following two years. A substantial part of income goes towards savings, and according to projections, these savings will make up more than 9 per cent of disposable income in 2014. However, according to SSB there is still room for clear growth in consumption in the years ahead. Higher interest rates will nevertheless curb income growth, but slightly lower savings will lead to consumption remaining high.
Investments in the petroleum sector increased by more than 14 per cent in 2011, with the same level of growth expected this year. The level of these investments is likely to remain high in the years ahead, but with somewhat lower growth rates. Demand for goods and services will steadily increase, according to Statistics Norway's predictions.
()NRK/Press release)
The International Monetary Fund (IMF) has presented its views on the Norwegian economy and Norwegian economic policy, and concludes that the Norwegian economy continues to perform well.(Photo: Finance Minister Sigbjørn Johnsen)..
The tax rates will be cut, says Prime Minister Jens Stoltenberg. He is not pleased with the way the tax system that he has been running for almost eight consecutive years.
..
Several economy professors think the government should consider selling their shares in Statoil.
..
The Executive Board of the Norwegian Central Bank (Norges Bank) has decided to keep the key policy rate unchanged at 1.5 percent. (Photo Norges Bank Deputy Governor Jan Qvigstad)
..
In presenting the revision of the 2013 Fiscal Budget, Finance Minister Sigbjørn Johnsen said the Government proposes a slight strengthening of the budget balance compared to the approved 2013 budget...
Prime Minister Jens Stoltenberg has announced that the Norwegian Government proposes tax changes from 2014 to strengthen competitiveness and profitability, and stimulate investments in the mainland economy...
The Government will spend NOK 750 million on a package of measures to assist the Norwegian forestry sector...
When the oil is no longer around to finance Norwegians' salary level, people's wages may have to be reduced by as much as 25 percent, predicts economist Knut Anton Mork.
..
Speaking at ILO's regional conference in Oslo, Norwegian Priem Minister Jens Stoltenberg said the crisis in Europe is dramatic. A financial crisis has now turned into a jobs crisis...
Prime Minister Jens Stoltenberg says Norway and Russia are continously developing a closer cooperation in important fields.
..
The Executive Board of the Norwegian Central Bank (Norges Bank) has decided to keep the key policy rate unchanged, at 1.5 per cent. The record low key policy rate has remained unchanged since March 14th last year.
..
As the Government began their annnual budget conference, Prime Minister Jens Stoltenberg said he is pleased with the development of the Norwegian economy, but sees challenges ahead in the work to form the budget for 2014.
..
Foreign and domestic demand, excluding petroleum activities, grew modestly in the 4th quarter of 2012. The gross domestic product (GDP) of mainland Norway was up 0.3 per cent in the 4th quarter.
..
