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Country Forecast Norway Updater

  • ID: 2114053
  • April 2016
  • Region: Norway
  • 17 Pages
  • The Economist Intelligence Unit
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The right-of-centre minority government, comprising the Conservatives and the Progress Party (FrP), is reliant on parliamentary support from two smaller, centrist parties: the Liberals and the Christian Democrats. They opted not to join a formal coalition (owing primarily to concerns about the presence of the FrP). Intra-party tensions will continue to surface on occasion, particularly on issues relating to immigration, which will remain high on the political agenda. Support for both main parties has declined since the 2013 general election, amid criticism that tax cuts have mainly favoured the rich and as the economy has weakened. However, The Economist Intelligence Unit's baseline forecast is that the government will serve its full term to late 2017. Opinion polls show similar levels of support for the centre-right and centre-left blocs in parliament, with both groups struggling to achieve a majority, implying a close contest at the next general election.

We expect modest progress in efforts to strengthen business activity in the mainland economy against the backdrop of declining oil output and revenue, but low productivity will remain a cause for concern. A gradual reduction in the headline corporation tax rate, from 27% in 2015 to 22% in 2018, is being phased in. A modest fiscal stimulus was announced in the 2016 draft budget.

Norges Bank (the central bank) cut its main policy interest rate to a record-low 0.5% March 2016, amid weak output and a deteriorating economic outlook. Further easing is expected in 2016, and it is possible that Norges Bank will join other central banks in imposing negative interest rates at some point, despite high and rising private-sector indebtedness and strong house-price growth.

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Country Forecast Norway Updater

Country forecast overview: Highlights

Country forecast overview: Key indicators

Country forecast overview: Business environment rankings

Country forecast overview: Norway's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
Taxes
Financing
The labour market
Infrastructure

Fact sheet

Outlook for 2016-20: Political stability

Outlook for 2016-20: Election watch

Outlook for 2016-20: International relations

Outlook for 2016-20: Policy trends

Outlook for 2016-20: Fiscal policy

Outlook for 2016-20: Monetary policy

Outlook for 2016-20: Economic growth

Outlook for 2016-20: Inflation

Outlook for 2016-20: Exchange rates

Outlook for 2016-20: External sector

Data summary: Global outlook

Data summary: Gross domestic product, current market prices

Data summary: Gross domestic product, at constant prices

Data summary: Gross domestic product by sector of origin

Data summary: Growth and productivity

Data summary: Economic structure, income and market size

Data summary: Fiscal indicators

Data summary: Monetary indicators

Data summary: Employment, wages and prices

Data summary: Current account and terms of trade

Data summary: Foreign direct investment

Data sources and definitions
Global data
Domestic data
Abbreviations

Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown

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