As reported in the latest OECD report, further increases in the Norwegian economy should be expected. The trend will be supported by a new stimulus in the form of higher oil and gas prices in the world markets.
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2018 will be better than expected
According to new estimates, Norway's GDP will increase by 2,5 percent in 2018. As you can read in the OECD's World Economic Outlook report, high oil prices in world markets will have a decisive influence on this state of affairs. The authors of the report also predict that growth will slow down in 2019, but will still exceed 2 percent per year.
Employment also has an impact
Growing employment also affects the dynamics of GDP growth. As already reported, there are more and more vacancies in Norway, wages are also rising. This drives consumption in households, which favors greater production of goods and services that are a component of GDP. However, as Norwegian companies are alarming, there is a shortage of specialists for vacancies. In the long run, this may adversely affect the situation in the economy. In order to prevent these negative trends, the government, among others, aboutlowered the income tax rate for these foreignerswho are employed on short contracts.
Stable condition of the budget
The OECD also appreciates the fact that the Norwegian government no longer finances economic ventures from its own budget. According to the authors of the report, this is directly related to higher GDP growth than initially anticipated. According to the document, Norway is a country with a high cost of living and high taxes. However, these funds are invested in education and in reducing bureaucracy, which has a positive impact on the condition of the economy.
The OECD also has some concerns
According to the published report, not all economic processes are optimistic. This mainly applies to real estate investments. The correction in house and flat prices initiated in 2017 may have a significant impact on further trends in Norwegian GDP. It is related to, inter alia, with limited access to mortgage loans, which results from higher requirements of financial institutions towards potential borrowers. It is the main factor slowing down investments in this sector, and thus - lower growth of the GDP ratio.
The Norwegian economy continues to grow - Positive economic sentiment
Higher GDP growth is also the result of positive sentiment in the economy, prompting enterprises to make key investment decisions. The report contains the results of the surveys which provide the following information:
Most companies saw their sales increase this year
One in three companies plan to increase employment within six months
Eight out of ten companies plan to expand further by the end of this year
Good news for Poles
The increase in Norwegian GDP is good news for Poles. Most of their emigration was dictated by the desire to improve their financial situation. Both Polish entrepreneurs and employees will benefit from the good mood in the economy. Wages and investments are rising, and the financial benefits of these phenomena should also be felt by the Polish community in Norway.
