norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january
TRANSCRIPT
![Page 1: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/1.jpg)
http://www.oecd.org/norway/economic-survey-norway.htm
2016 OECD Economic Survey of Norway
Rebalancing the economy
Oslo, 18 January 2016
@OECD@OECDeconomy
![Page 2: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/2.jpg)
• Continue prudent macroeconomic policies, including managing petroleum wealth equitably and sustainably
• Use structural policies to boost living standards -- this Survey includes in-depth examination of higher education (Chapter 1) and rural economies (Chapter 2)
Key messages of the Survey
![Page 3: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/3.jpg)
GDP per capita is high
Source: OECD (2015), "Aggregate National Accounts, SNA 2008 (or SNA 1993): Gross domestic product", OECD National Accounts Statistics (database); OECD (2015), Analytical Database.
Even accounting for cost-of-living differences, Norway’s GDP per capita is now about 67% greater than that of the Euro Area
![Page 4: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/4.jpg)
Well-being is impressive
Source: Calculations based on OECD (2015), "Better Life Index 2015", OECD Social and Welfare Statistics (database); OECD (2015), "Income distribution", OECD Social and Welfare Statistics (database).
![Page 5: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/5.jpg)
Norway’s oil fund has become very large - helping finance the budget
Source: Norwegian Ministry of Finance.All petroleum-sector revenues are channelled into the fund—this helps protect the economy from some of the problems created by uncertain and fluctuating oil prices
![Page 6: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/6.jpg)
BUT THERE ARE CHALLENGES
![Page 7: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/7.jpg)
The recent oil-price fall illustrates the vulnerabilities of petroleum dependence
Source: OECD, Analytical Database.
Between Q2 2014 and Q4 2o15 the oil price fell by 59%, prompting exchange-rate depreciation
![Page 8: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/8.jpg)
Cost competitiveness has been falling
Source: OECD, Analytical Database.
Unit labour costs in Norway are about 60% higher than they were in 2000. In the Euro Area they are less than 30% higher
![Page 9: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/9.jpg)
Public spending is high
Source: OECD, National Accounts at a Glance.
![Page 10: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/10.jpg)
House prices are booming
Source: OECD, Analytical House Price database; Norges Bank (2015), "Monetary Policy Report with financial stability assessment 4/15".
![Page 11: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/11.jpg)
PAVING THE WAY FOR ECONOMIC TRANSITION
![Page 12: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/12.jpg)
Containing fiscal expansion
Source: Norwegian Ministry of Finance.
1. Rising oil-fund wealth has meant allowable fiscal deficits under Norway’s fiscal rule have grown rapidly
2. Budgets have been pitched well below the allowable level
![Page 13: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/13.jpg)
Source: OECD (2015), "Revenue Statistics: Comparative tables", OECD Tax Statistics (database); Norwegian Ministry of Finance.
The overall tax burden is high
Norway’s high tax burden makes it harder the economy to rebalance in the wake of oil-price shocks
![Page 14: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/14.jpg)
Business regulation is in reasonable shape
Norway scores well in the OECD’s product-market regulation index, though it is losing its lead as other countries catch up
Source: OECD (2015), "Economy-wide regulation", OECD Product Market Regulation Statistics (database).
![Page 15: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/15.jpg)
• Past Surveys have identified several areas where there is room for efficiency improvements: – Primary and secondary education (2008
Survey)– Health care (2010 Survey)– Sickness and Disability Benefit (2010 Survey)
• This Survey identifies issues in higher education (Chapter 1) and in agricultural support (Chapter 2)
Improving public-spending efficiency
![Page 16: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/16.jpg)
GREATER EFFICIENCY AND QUALITY IN HIGHER
EDUCATION WOULD HELP REBALANCING
![Page 17: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/17.jpg)
In primary and secondary education high spending has led to only average performance…
Source: OECD (2014), PISA 2012 Database; OECD (2015), "Education at a Glance 2015", Table B1.1a.
![Page 18: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/18.jpg)
…and the same applies to higher education
Source: OECD (2015), "Education at a Glance 2015", Table B1.2; Author's calculations based on Times Higher Education (THE), "World University Rankings 2015-2016“.
According to this measure, Norway’s best university ranks lower than those in other Nordic countries
![Page 19: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/19.jpg)
Many small providers
Source: Norwegian Social Science Data Services (2015), Database for Statistics on Higher Education.
Many small institutions are providing tertiary education in remote areas…
… they often face challenges in cost-efficiency and quality
• Mergers underway will reduce the number of institutions from 53 to 42, further mergers should be promoted
![Page 20: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/20.jpg)
Relatively low degree completion and long study times are also problematic
Source: OECD (2013), "Education at a Glance 2013", Table A4.1; Statistics Norway.
![Page 21: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/21.jpg)
• more targeted incentives for students to complete their courses on time
• steering student choices for instance, via loan discounts for subjects with high demand
• making institutions’ funding more contingent on getting students to complete degrees
Student choices and provider incentives could be improved by:
![Page 22: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/22.jpg)
SHIFTING RURAL SUPPORT
![Page 23: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/23.jpg)
Agricultural subsidy is high
Source: OECD (2015), "Agricultural Support Estimates (Edition 2015)", OECD Agriculture Statistics (database).
Norwegian agricultural support comprises around 100 schemes providing financial support plus numerous import tariffs
• Reduce agricultural import tariffs and subsidies • Encourage economic diversification by broadening
support for rural areas
![Page 24: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/24.jpg)
Many small municipalities
Source: Statistics Norway; Statistics Finland; Statistics Sweden; Statistics Denmark.
• Improve the efficiency of Norway’s many small rural municipalities, including through mergers
![Page 25: Norway 2016-oecd-economic-survey-rebalancing-the-economy-oslo-18-january](https://reader036.vdocuments.us/reader036/viewer/2022070515/5876da131a28ab1d238b68dd/html5/thumbnails/25.jpg)
25
More Information…
http://www.oecd.org/norway/economic-survey-norway.htm
OECD
OECD Economics
Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.