Preliminary Conclusions of the IMF mission

An IMF mission team presented today its preliminary conclusions on the Norwegian economy to the Ministry of Finance. – I am pleased that the IMF broadly supports the government’s economic policy. The reports from the IMF give important contributions to the economic and political debate in Norway, says State Secretary Geir Axelsen.

According to the statement, the Norwegian economy has performed enviably, underpinned by a strong macroeconomic and monetary policy framework. Despite that the Norwegian economy is entering its fourth consecutive year of above-trend growth, inflation is low and employment growth is near record high. The outlook for the near term looks bright, supported by continued strong global demand and high oil prices.  The IMF points out that wage pressures could increase in the run-up to the two-year wage negotiations in spring 2008.

The IMF particularly welcomes that Norway for the first time in the 2007 Budget stayed on the 4 percent rule of the Government Pension Fund - Global (GPF). Furthermore, they recognise that the rule allows for transitory deviations from the 4 per cent path over the business cycle. In response to the current upswing in the Norwegian economy, the IMF advice is to keep the deficit well below the 4 percent rule in the 2008 and subsequent budgets. 

The broad-based parliamentary agreement on pension reform is welcome, but the IMF believes that the agreement must be supplemented by policy measures on other areas to ensure long run sustainability of public finances. Also, the IMF suggests that measures in the sickness and disability schemes are introduced to strengthen the incentives to return to work.

The IMF assesses that monetary policy has been appropriate and that the financial system seems to be in a good shape.

The press conference is available via web-TV