Country Forecast Norway
The Economist Intelligence Unit, September 2012, Pages: 52
The centre-left coalition of the Labour Party, the Socialist Left Party (SV) and the Centre Party returned to office with a slim overall majority at the 2009 election. The risk that the coalition will break up before the 2013 election is low, although there are internal tensions stemming from the weakness of the junior partners, the SV and the Centre Party. The Economist Intelligence Unit expects Labour to continue to govern up to 2013. A centre-right opposition bloc holds a solid lead in terms of voter support in opinion polls, but the Conservatives and Progress Party have yet to show their ability to unite around a common platform, so an election victory is far from assured. GDP growth is forecast to accelerate to 3.8% in 2012, based on a strong offshore sector and robust private demand. Norges Bank (the central bank) is forecast to maintain a low interest rate in 2012 to counter upward pressure on the currency. Over the forecast period, economic growth will average 2.6%. The government budget and the current account will remain comfortably in surplus.
Opinion polls in July showed that the centre-right parties (the Conservatives, the Progress Party, the Liberals and the Christian Democrats) had a strong lead over the three governing centre-left parties, with support of nearly 60%.
Norway's sovereign wealth fund is reconsidering its investment strategy to become more actively and aggressively managed, taking on more risk, as it reported negative returns in its second-quarter results.
Country Forecast Norway
Norway at a glance: 2012-16
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast
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
Piecemeal reform of local government is expected
Political outlook: Election watch
Political outlook: Key players to watch
Jens Stoltenberg
Jonas Gahr Store
Trond Giske
Erna Solberg
Siv Jensen
Trine Skei Grande
Political outlook: International relations
Demographic assumptions
Norway's demographics will remain relatively favourable until 2020
Uncertainty surrounds immigration from outside Europe
The more remote regions are undergoing depopulation
Business environment outlook: Business environment rankings
Some defects mar a generally favourable environment
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
Taxes
Financing
The labour market
Infrastructure
Business environment outlook: Macroeconomic environment
Currency volatility is one downside to a favourable overall picture
Business environment outlook: Policy towards private enterprise and competi
New regulations are to be introduced to improve competition
Business environment outlook: Policy towards foreign investment
Foreign investment will continue to be restricted in some sectors
There will be opportunities for oil and gas investments
Business environment outlook: Foreign trade and exchange controls
Norway will remain committed to free trade in almost all sectors
Argument over EU postal directive carries wider risks to EEA agreement
Business environment outlook: Taxes
No major tax system improvements are expected
Business environment outlook: Financing
The financing environment will remain highly favourable
Mortgage lending presents a medium-term risk to the banking sector
Business environment outlook: The labour market
Strikes over early retirement and wage rises pose risks in some sectors
Business environment outlook: Infrastructure
The government will increase spending on road and rail projects
Economic forecast: Policy trends
Economic forecast: Fiscal policy
Economic forecast: Monetary policy
Economic forecast: International assumptions
Economic forecast: Economic growth
Economic forecast: Sectoral trends
Manufacturing has shrunk to 10% of GDP since oil sector expansion began
Crude oil production will continue to decline during the forecast period
Economic forecast: Inflation
Economic forecast: Exchange rates
Economic forecast: External sector
Economic forecast: Foreign direct investment in Norway
Stocks and flows
Origin and distribution
Determinants
Impact
Potential
Market opportunities: Market outlook
Consumer spending growth will continue to strengthen
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 rises
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
Abbreviations
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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