Economic Survey 3-2000

Preliminary figures from the quarterly national accounts show that the pick-up in activity in the mainland economy during the last few quarters continued in the second quarter of 2000. On the demand side, investment, household demand and traditional merchandise exports expanded, while general government consumption appears to have exhibited a sluggish trend. Developments so far this year underpin the impression that the pause in growth in the second half of 1998 and first half of 1999 was transitory. Employment also appears to have edged up from the relatively stable level through 1999. With virtually parallel growth in the labour force, unemployment is now at approximately the same level as in the first half of 1999. As a result of a pronounced rise in energy prices and fairly steep increases in import prices, consumer prices have so far this year risen at a faster pace than in 1999. Measured by the harmonized index of consumer prices, inflation is now one percentage point higher in Norway than in the EU, and hence noticeably higher than the level aimed at by the European Central Bank.