The Norwegian economy seems to be back on a positive trend, following two years of declining economic growth and falling petroleum prices. The growth rate will increase from a modest 0.9% in 2016, to an estimated 1.7% in 2017, and climb to 2.1% in 2018, according to estimates in the OECD’s recently published World Economic Outlook.
Increased confidence
This is, if not remarkable, then at least a surprisingly quick recovery from the pain from the downturn in the oil & gas sector over the last couple of years. Stimulating financial and monetary measures have proved to «soften the blow» and kept Norwegian growth figures positive during 2015 and 2016. Lately, the oil price has recovered a bit, the Norwegian Kroner remains favourably valued for exports and inbound tourism, and consumer confidence has increased. Also, offshore traffic is on the rise for the first time since July 2014. And next year, investment in the oil & gas sector is expected to pick up again.
Back on track
The OECD report commends Norwegian policy-making and its social model. Over time, Norway’s high taxation and public spending levels have produced an egalitarian society without large social divides. This has also, in the short run, put the Norwegian economy back on track. Norway’s Finance Minister, Siv Jensen, accepts the honour, and says it is proof that the Government has prescribed the right medicine. She also points to the IMF, whose predictions are similar to those of the OECD.
This is good news for Norway and everyone doing business here. Luckily, Norway isn’t alone. Global GNP growth for 2017 is estimated to reach 3.5%.