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Country Forecast Norway

  • ID: 2138652
  • Country Profile
  • August 2016
  • Region: Norway
  • 49 Pages
  • The Economist Intelligence Unit
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Background: The Labour Party governed almost without interruption in 1935-65 and largely dominated politics until 2001, when a minority coalition comprising the Conservatives, the Christian Democrats (KrF) and the Liberals swept to power. After the 2005 election Labour returned to office in a centre-left coalition with the Socialist Left Party (SV) and the Centre Party-the first majority government for two decades. The coalition was re-elected in 2009, but lost the September 2013 election, which led to a new minority right-of-centre coalition of the Conservatives and the Progress Party (FrP).

Political structure: A general election is held every four years and there is no right of dissolution between elections. The 169 members of the Storting (parliament) are elected on the basis of proportional representation, with 4% of the national vote guaranteeing automatic representation. The Storting has only one chamber.

Policy issues: Fiscal rules allow a proportion of oil wealth to be spent each year, and successive governments have used this to fund higher public spending in areas such as infrastructure, education, healthcare and local government. The government is continuing its predecessor's broadly centrist programme while placing greater emphasis on promoting non-oil investment and tax cuts. Near-term efforts are focused on limiting the negative spillover effects of the oil price decline on wider economic activity. Spending from Norway's oil fund is expected to rise, but will remain comfortably within the country's fiscal guidelines. Despite a cross-party agreement on tackling climate change, tension will persist between the coalition partners about the balance between industrial development and environmental protection.
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Country Forecast Norway

Norway--highlights: Political outlook

Norway--highlights: Demographic outlook

Norway--highlights: Business environment outlook

Norway--highlights: Economic outlook

Norway--highlights: Market opportunities

Norway--highlights: Long-term outlook

Fact sheet

Political outlook: Political forces at a glance

Political outlook: Political stability

Political outlook: Political and institutional effectiveness

Political outlook: Election watch

Political outlook: Key players to watch
Erna Solberg
Siv Jensen
Jonas Gahr Store

Political outlook: International relations

Demographic assumptions
Following a rise in immigration, population growth is set to slow
Norway's demographics will remain relatively favourable until 2020
Immigration from outside Europe is likely to fall as policy is tightened
The more remote regions will continue to undergo depopulation

Business environment outlook
Policymakers focus on labour market and tax reform

Business environment outlook: Norway's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
The labour market

Business environment outlook: Macroeconomic environment
Central bank's dual mandate allows for a focus on growth

Business environment outlook: Policy towards private enterprise and competition
Efforts to promote competition will continue

Business environment outlook: Policy towards foreign investment
The government has set up Norway's first inward-investment agency

Business environment outlook: Foreign trade and exchange controls
EEA membership provides single-market access

Business environment outlook: Taxes
Tax reform to focus on shift from direct to indirect taxes

Business environment outlook: Financing
The banking sector is bolstered by robust capital ratios

Business environment outlook: The labour market
Labour market flexibility is improving

Business environment outlook: Infrastructure
A world leader in digital infrastructure

Economic forecast: Policy trends

Economic forecast: Fiscal policy

Economic forecast: Monetary policy

Economic forecast: International assumptions

Economic forecast: Economic growth

Economic forecast: Sectoral trends
Agriculture and manufacturing will become less important to the economy

Economic forecast: Inflation

Economic forecast: Exchange rates

Economic forecast: External sector

Economic forecast: Foreign direct investment in Norway
Stocks and flows
Origin and distribution

Market opportunities: Market outlook
Despite weakening, consumer spending will continue to drive GDP growth

Market opportunities: Consumer expenditure
Sociological changes will have an impact on consumption patterns

Market opportunities: Social indicators and living standards

Long-term outlook: The long-term outlook
The ageing of the population will become an issue from 2020
Oil wealth may mask the need for structural reforms
Long-term growth will depend largely upon productivity increases

Long-term outlook: Methodology for long-term forecasts
Growth projections
Definitions of variables
The independent variables include:
Summary of findings
Productivity growth

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

Guide to the business rankings model
Outline of the model
Calculating the rankings
Measurement and grading issues

Indicator scores in the business rankings model
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Note: Product cover images may vary from those shown