Economic Survey 1-2001

2000 was a year of consolidation for the Norwegian economy. Growth in production and employment was very moderate and the economic boom of the last half of the 1990s ended. Cost inflation continued, but at a more moderate pace than in previous years even though unemployment was low and some labour market segments were tight. Despite sharp growth in oil revenues, fiscal policy was neutral while monetary policy shifted to a more contractionary stance. Surpluses in central government accounts and the balance of payments were record high. Excluding the rise in energy prices and the effect of exchange rate movements, price inflation remained moderate, partly because productivity growth in the mainland economy picked up following a sluggish trend in recent years. The picture of the Norwegian economy that emerges at the beginning of 2001 must therefore be said to be unusually favourable. Through our own and, not least, others' help, the Norwegian economy has experienced a soft landing following a relatively turbulent period.