Norway: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Norway
IMF Staff Country Reports, September 18, 2024
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- Norway: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Norway
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Bibliographic details
- Published: September 18, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400288876.002
Executive summary and core findings
- Boosting labor supply, containing public expenditure pressures, and raising productivity are required for Norway to continue its strong economic performance and preserve its welfare model.
- A recent White Paper by the Ministry of Finance is identified as rightly raising these key long-term issues for Norway’s economy.
- Real gross domestic product growth slowed in 2023 and is expected to gradually rebound in the near term as private domestic demand strengthens supported by higher real incomes.
- The financial system appears resilient and banking system buffers are strong.
- Tight macroprudential policies should remain in place to mitigate systemic vulnerabilities.
- Long-term fiscal challenges should be more forcefully addressed.
- Norway has the largest proportion of the population on disability-related benefits among the organisation for economic co-operation and development countries, and reforming costly and distortionary social benefit systems is possibly the most important and politically difficult reform pending.
- Although Norway boasts one of the highest levels of labor productivity among its peers, it has slowed faster than in other countries.
Policy recommendations and structural priorities
- Boost labor supply:
- Reform social benefit systems, with priority on disability-related benefits that have high take-up relative to OECD peers.
- Contain public expenditure pressures:
- Address long-term fiscal challenges more forcefully to preserve fiscal sustainability and the welfare model.
- Raise productivity:
- Improve conditions to facilitate sectoral reallocation.
- Promote innovation and technology adoption to reverse the recent slowdown in labor productivity.
- Maintain financial stability stance:
- Keep tight macroprudential policies to mitigate systemic vulnerabilities given the generally resilient financial system and strong banking buffers.
Risk environment and outlook
- Near-term outlook:
- Real GDP growth: slowed in 2023; expected to gradually rebound in the near term as private domestic demand strengthens supported by higher real incomes.
- Financial sector:
- Systemic vulnerabilities should continue to be mitigated via macroprudential policy despite resilience and strong buffers.
- Structural risks:
- High share of population on disability-related benefits poses fiscal and labor market challenges.
- Slowing labor productivity relative to peers risks longer-term growth potential unless addressed.
Subject focus and keywords
- Subject: Central bank policy rate, Expenditure, Financial services, Inflation, Labor, Labor markets, Prices
- Keywords: Central bank policy rate, consumer price inflation, Global, holdings of SDR, Inflation, inflation expectation, inflation pressure, Labor markets, monetary policy stance
Publication and metadata
- Publication title: Norway: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Norway
- Publication date: September 18, 2024
- Pages: 84
- Volume: 2024
- Issue: 297
- Series: Country Report No. 2024/297
- DOI: https://doi.org/10.5089/9798400288876.002
- Stock No: 1NOREA2024001
- ISBN: 9798400288876
- ISSN: 1934-7685
International Monetary Fund. Norway: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Norway. September 18, 2024.
Content in this bundle
- 1norea2024001-print-pdf