Executive summary - Key recommendations

Norway continues to benefit from its well managed petroleum wealth and sound macroeconomic policies, achieving levels of well-being and social cohesion that have remained high by international standards. The strength of the economy and prudent supervision have helped the financial system to weather the financial crisis well, though high household debt and elevated house prices pose a risk. In the wake of the global slowdown and the euro area turmoil, the macroeconomic policy challenge has shifted towards preserving the momentum of growth in the context of the flexible inflation target and the well established fiscal framework. Public expenditure rose during the crisis and income redistribution remains extensive, in line with Norway’s tradition. Ensuring that public spending is delivered in economically efficient ways remains a priority.