Economic Survey 4-2010

Growth in the Norwegian economy has picked up appreciably since the summer, partly due to a rise in household demand for consumer goods and dwellings. General government demand has shown little change recently, following a period of high growth. An expansionary fiscal and monetary policy has contributed to and will continue to stimulate growth in household demand in the period ahead. Investment in the mainland economy is also showing underlying growth and the sharp decline in manufacturing investment is drawing to a close. Global growth has been fairly high in 2010, boosting exports of traditional goods. The fall in manufacturing production has given way to a new upswing. The decline in employment has come to a halt recently, and employment increased slightly in the last quarter. Unemployment is fairly stable. Underlying inflation was falling up to the first half of 2010, and has since been stable and low. As a result of a sharp rise in energy prices, overall consumer price inflation will probably be 2.4 per cent in 2010. Strong productivity growth and slower wage growth had a dampening effect on inflation, however. The appreciation of the krone through 2009 has also pushed down inflation.