Economic recovery has already started in Norway, with the large fiscal and monetary stimulus boosting consumption and sustaining employment. The rebound in house prices is a sign that this stimulus is encouraging households to spend rather than to consolidate their balance sheets. Growth in private investment will resume next year, once consumption growth is well established and credit markets return to normal. Unemployment has barely increased, partly thanks to specific government measures, but also because of a reversal of migration flows, though the size of the latter is not known with certainty. Given the large deviation from the “4% rule” in 2009 and 2010, sizeable subsequent tightening of the fiscal stance is desirable for both macroeconomic management and medium-term fiscal sustainability. Monetary policy tightening has already started and should continue for some time, as the economy recovers, the labour market tightens and inflation expectations edge up. Policies to improve public spending efficiency should be pursued further, helping fiscal consolidation for the years to come.

Norway has been hit hard by the global economic downturn, even if the decline in output is projected to be less sharp than in other countries. The export sector is severely affected, and domestic demand, mainly investment, is contracting rapidly.

After the remarkable performance of the past few years, the Norwegian economy is now slowing toward its potential rate of growth. Domestic demand is moderating as a result of the increased cost of borrowing, falling house prices and declining terms of trade. Inflation remains higher than desirable and rising labour costs are undermining competitiveness. The off-shore (oil and gas) sector will continue to support mainland demand through spill-over from oil investment.

The number of broadband subscribers in the OECD rose to 235 million by December 2007, up 18% from 200 million subscribers in December 2006.This growth increased broadband penetration rates to 20 subscriptions per 100 inhabitants, up from 16.9 in December 2006.

Both the size and the relative incidence or frequency of the foreign-born population have increased in all OECD countries since 1995. So while there have been large increases in traditional migration countries such as the US and New Zealand, there have also been sharp rises in Denmark, Korea, Ireland, Italy, Norway and Spain, where inward migration has recently taken off.