The International Monetary Fund (IMF) has presented a report with preliminary conclusions on the Norwegian economy after its annual visit to Norway. The IMF sees the economic developments in Norway over the last years, with full employment and increasing participation in the labour force, as positive.

In the report, the IMF evaluates the economic developments and policy in Norway. The IMF gives a positive evaluation of the economic policy, which is based on a strategy of a stable exchange rate, consolidation of government finances and co-operation between social partners.

-I am satisfied that the IMF agrees that the budget proposal for next year is appropriate to the current economic situation, says Minister of Finance, Mr Gudmund Restad.

The Minister of Finance also expresses satisfaction over the positive evaluation the IMF gives the implementation of monetary policy. The IMF does, however, argue that a change in the mandate for the monetary policy that more explicitly recognises low inflation as a precondition for long term stability in the exchange rate would increase the credibility of the monetary policy regime.

Mr Restad points out that the importance of low price- and cost inflation as a necessary precondition for a stable economic development was underlined already in 1994, when the current regulation for monetary policy was introduced.

The IMF argues that the Norwegian tax level is high. The Fund also criticises the large government support for the agricultural sector.

-I will point out that taxes and other duties are necessary elements in a country that wants to have a strong public sector and to finance a high level of welfare, the Minister of Finance says. Even so, the tax level in Norway is not much higher than in many other European countries. With regard to transfers to the agricultural sector, there is wide political support in Norway for the main goals of agricultural policy, Mr Restad says.

The IMF report can be downloaded from the internet.