Organisation for Economic Co-operation and Development (OECD) survey of Norway

The Organisation for Economic Co-operation and Development (OECD) presented its economic survey of Norway today. The survey gives a comprehensive analysis of the Norwegian economy.

The OECDs independent assessment of the Norwegian economy plays an important role in the economic debate, and the Norwegian authorities are in broad agreement with the OECD regarding the main challenges for the Norwegian economy, says the Minister of Finance Per-Kristian Foss.

The OECD has an overall positive assessment of the Norwegian economic policy framework. They note that Norway’s handling of its oil assets so far has been exemplary, but point out that the transfers from the Petroleum Fund have exceeded the real return on the Fund, and that the transfers now should move towards the 4% trajectory implied by the fiscal rule, especially if the economy remains very buoyant.

The OECD stresses the importance of pursuing a pension reform in line with the Government’s proposal. The OECD emphasizes the significance of linking actual contributions and actual benefits and thus strengthening work incentives. However, the OECD notes that even a successful implementation of the pension reform will not guarantee long-run sustainability and that additional measures will be required. The survey recommends, among other factors, to curtail the upwards trends in disability and early retirement. Also, proposals that would shorten the standard working week should be resisted.

The OECD finds some areas of Norwegian economic policy more problematic. They see no reason why public subsidies to the private early retirement scheme, AFP, should continue, except for those with long work histories in arduous jobs. The organization also recommends gradually phasing out the two-thirds guarantee in the public sector occupational pension scheme.

The country survey also includes a special chapter about the performance of the Norwegian health care sector. The OECD notes that recent reforms have increased activity and efficiency, improved citizen satisfaction and eliminated shortages, but at the same time spending has accelerated. The OECD recommends, among other factors, to reduce the proportion of DRG (diagnosis related groups) finance and to gradually increase and/or introduce co-payments.

Read the Policy Briefher

OECD's website on Norway here