Economic Survey 2-2001

In March 2001, the Government presented new guidelines for economic policy, which appear to have received broad political support. It introduced a guideline for the use of revenues from the Petroleum Fund and an explicit inflation target for monetary policy. According to the new rules, the structural, nonoil government budget deficit shall be equal to the expected real return on the Petroleum Fund at the beginning of the fiscal year. Previously, it could be said that fiscal policy was oriented so that the structural nonoil budget deficit should expand over time in step with mainland GDP trend growth and hence not be influenced by changes in petroleum revenues/wealth. Fiscal policy shall also continue to contribute to stabilizing fluctuations in the economy, a factor that may result in deviations from the level implied by the longterm guideline.