Country Risk Service Norway
The Economist Intelligence Unit, April 2011, Pages: 17
The centre-left coalition of the Labour Party, the Centre Party and the Socialist Left Party was re-elected for a second four-year term at the general election in September 2009. Despite a number of policy disagreements, the coalition should be able to hold together at least until the local elections in September 2011, and probably until the next general election in 2013. The government will continue to implement a centrist programme, with an emphasis on supporting employment, environmental policies and reforming education and healthcare services. The mainland economy will continue to strengthen, but output from the offshore sector is likely to be more volatile. Norges Bank (the central bank) has raised its official interest rate, the sight deposit rate, three times since the tightening cycle began in October 2009, but has kept it on hold at 2% since May 2010. The sight deposit rate is expected to rise to between 4% and 5% by the second half of the forecast period. The general government budget and current-account balances will remain comfortably in surplus.
The issues of the development of the Lofoten region and electricity masts in Hardanger fjord have been dealt with in a way that has defused political disagreement within the coalition and lowers the chance of a break-up.
The government has updated its management plan for the Barents Sea and the area around the Lofoten isles. There will not be an environmental impact assessment for the Lofoten-Vesteralen offshore region until 2013 at the earliest. The government approved new areas for oil exploration in the Barents Sea following a delineation agreement with Russia that was approved by both the Norwegian and Russian parliaments.
Country Risk Service Norway
Norway at a glance: 2011-15
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast
Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Rating definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk
Central scenario for 2011-15: Political stability
Central scenario for 2011-15: Election watch
Central scenario for 2011-15: International relations
Central scenario for 2011-15: In focus
Norway participates in NATO-led mission over Libya
Central scenario for 2011-15: Policy trends
Central scenario for 2011-15: Fiscal policy
Central scenario for 2011-15: Monetary policy
Central scenario for 2011-15: Economic growth
Central scenario for 2011-15: Inflation
Central scenario for 2011-15: Exchange rates
Central scenario for 2011-15: External sector
Key risk indicators
Ratings summary
Quarterly indicators
International assumptions summary
Economic structure
Public finances
Exchange rates, interest rates and prices
Financial sector
Current account
Foreign payment and liquidity indicators
External trade
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