IMF Staff Country Reports

Norway: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Norway

September 18, 2024

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International Monetary Fund. European Dept. "Norway: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Norway", IMF Staff Country Reports 2024, 297 (2024), accessed October 8, 2024, https://doi.org/10.5089/9798400288876.002

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Summary

The 2024 Article IV Consultation discusses that boosting labor supply, containing public expenditure pressures, and raising productivity will be required for Norway to be able to continue its strong economic performance and preserve its welfare model. A recent White Paper by the Ministry of Finance rightly raises these key issues facing Norway’s economy in the longer term. 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. Tight macroprudential policies should remain in place to mitigate systemic vulnerabilities. The financial system appears resilient and banking system buffers are strong. 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. To reverse this trend, conditions should be improved to facilitate sectoral reallocation as well as innovation and technology adoption.

Subject: Central bank policy rate, Expenditure, Financial sector policy and analysis, Financial sector stability, Financial services, Financial stability assessment, Inflation, Labor, Labor markets, Labor productivity, Prices, Production, Productivity, Public debt

Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), Central bank policy rate, Financial sector stability, Financial stability assessment, Inflation, Inflation targeting, Labor markets, Labor productivity, Productivity

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