Economic Survey 1-2008

2007 proved to be a booming year for the Norwegian economy. The economy continued to expand at a brisk pace, inflation was low, employment increased sharply and unemployment fell to a level that has not been seen in Norway for several decades. Buoyant growth in the world economy has resulted in strong growth in traditional Norwegian export goods and prices for many important export products have increased markedly. Household consumption has been very high in Norway, but at the same time gross investment has increased at a faster rate than consumption over several years. While the increase in petroleum investment was particularly high in the beginning phase of the recovery that started in 2003, growth in mainland investment has gradually taken over as a key driving force behind the upturn. Developments ahead will probably be marked by lower economic growth owing to supply- side constraints and weaker international developments.