A new Organization for Economic Cooperation and Development (OECD) report released on Wednesday showed Norway’s economy is being managed well and continuing to grow, and citizens are generally satisfied with the way the economy is traveling. The OECD warned, however, that the prosperity obscures the fact productivity growth is slower, and oil dependency makes the economy vulnerable to global changes.
“Rational use of oil wealth and the active use of monetary policy has padded Norway against the worst of the financial crisis recession,” stated the report. “That is why Norway faced few of the dilemmas that characterize macroeconomic policy in many OECD countries for the moment.”
News bureau NTB reported that the OECD believes oil dependency makes Norway vulnerable to price changes. Higher salaries than in other countries also affects industries connected with foreign trade, average working hours are low and a high number of people are registered on pension payments.
“To maintain growth in living standards as oil production falls, a thriving entrepreneurial culture is needed to discover and exploit opportunities and attract venture capital and other resources,” said the report. “The tax level should gradually drop, as should the growth in public spending. Government money should be used more efficiently and state funded higher education become more cost effective.”