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OECD
ECONOMIC
SURVEYS
1981-1982
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NORWAY
DD 3,1 3 I 3.171 0 3
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B D D ? i 3 .17 ) D 3
5 7
MARCH
DJ
1982
nnnrnn
n mn n n n mn
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D I V 1 1 0 ? ? 3 il I 3 7
D
i B 3 3 D ?J J D D 1 3
OECD ECONOMIC SURVEYS
:' '~ n j y E s
~
' ' f ' F-NCE S
NORWAY
MARCH 1982
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
The Organisation for Economic Co-operation
(OECD) was set up under a Convention signed
and Development
in Paris on 14th
December 1960, which provides that the OECD shall promote policies
designed:
to achieve the highest sustainable economic growth and employ¬
ment and a rising standard of living in Member countries, while
maintaining financial stability, and thus to contribute to the deve¬
lopment of the world economy;
to contribute to sound economic expansion in Member as well as
non- member countries in the process of economic development:
to contribute to the expansion of world trade on a multilateral,
non-discriminatory
basis
in
accordance
with
international
obligations.
The Members of OECD arc Australia, Austria. Belgium, Canada.
Denmark, Finland, France, the Federal Republic of Germany. Greece.
Iceland, Ireland, Italy. Japan, Luxembourg, the Netherlands, New Zea¬
land, Norway, Portugal, Spain. Sweden, Switzerland, Turkey, the United
Kingdom and the United States.
The Socialist Federal Republic of Yugoslavia is associated in certain
work of the OECD, particularly that of the Economic and Development
Review Committee.
OOECD, 1982
Application for permission lo reproduce or translate all or part of this publication should be made to:
Director of Information, OECD
2, rue André-Pascal, 75775 PARIS CEDEX 16, France.
CONTENTS
Introduction
I.
Recent economic developments and short-term prospects
Developments in 1981
II.
III.
IV.
8
8
The stance of economic policy
Prospects for 1982
15
18
Medium-term policy issues
20
The oil sector, past trends and prospects
Adjustment of the economy to rising oil revenues
21
25
Some medium-term scenarios
29
Implications for economic policy
31
Income formation and economic policy
32
The institutional setting
32
The functioning of labour markets
33
Rigidities in income determination
37
The experience with price controls and incomes policy
Some policy considerations
40
41
Conclusions
42
Annex:
Chronology of major economic policy events
Statistical annex
47
53
TABLES
Text
1.
Demand, output and national income
2.
3.
International comparison of consumer price developments
Contractual wage increases and wagedrift
12
12
8
4.
The current external balance
14
5.
6.
7.
8.
9.
General government revenue and expenditure
Anticipated and actual developments in money supply
Short-term prospects
Oil and gas production and contribution to national income
Oil revenue projections 1 980-2260
15
17
19
23
23
10.
Government budget deficits in selected OECD countries
26
1 1.
Alternative medium-term scenarios
30
12.
13.
14.
Wage dispersion in industry
Real disposable income developments for different income groups
Non-wage labour costs in industry
38
39
39
Statistical annex
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
Supply and use of resources, current prices
Supply and use of resources
Gross domestic product by industry of origin, current prices
Gross domestic product by industry of origin
General government income and expenditure
Production by sector
Labour market and employment
Balance of payments
Foreign trade, total and by area
Prices and wages
Money and credit
53
54
55
56
57
58
59
60
62
62
63
DIAGRAMS
1.
Indicators of demand
2.
Labour market indicators
1 1
3.
Price and wage developments
Oil and gas fields on the Norwegian continental shelf
22
Estimated output from fields in production or under development
External competitiveness and export performance
Production in manufacturing industries
24
27
28
Wages and unemployment
Labour market tightness indicator
Excess supply of labour
Number of persons affected by reduced economic activity
Functioning of labour markets
33
34
34
35
37
4.
5.
6.
7.
8.
9.
1 0.
1 1.
1 2.
9
13
BASIC STATISTICS OF NORWAY
THE LAND
Area (1 000 sq. km) 1981
Agricultural area (1 000 sq. km) 1981
Productive forests (1 000 sq. km) 1981
324
9
65
Major cities (1.1.81):
Oslo
Bergen
451 789
207 753
THE PEOPLE
Population (31.12.80)
No. of inhabitants per sq. km
4 092 539
13
Net natural increase
(average 1971-1980)
20 423
Per 1 000 inhabitants
(average 1971-1980)
Civilian employment, 1980
of which: Industry (%)
Agriculture, forestry
and fishing (%)
Other activities (%)
1 914000
29.7
8.5
61.8
5.0
PRODUCTION
Gross domestic product in 1 980
(millions of Kr.)
GDP per head (USS)
Gross fixed capital formation (1980):
283 512
14 019
Percentage of GDP
Per head, USS
24.7
3 509
THE GOVERNMENT
Public consumption in 1980
(percentage of GDP)
General government current and
capital expenditure
(percentage of GDP)
18.8
4.0
General government current revenue
in 1980 (percentage of GDP)
54.0
Composition of Parliament
(No. of seats):
Labour party
Conservative party
Christian democratic party
Centre (Agrarian) party
Progress party
The socialist left party
Liberal party
Total
66
53
15
11
4
4
2
155
Next general election: September 1 985
Last general election: 1981
FOREIGN TRADE
Exports of goods and services as a
percentage of GDP
(average 1976-1980)
of which:
Imports of goods and services as a
43.2
Gross freight and oil drilling
earnings (1976-1980)
Main exports in 1980 (percentage
of total commodity exports):
Forestry products
Base metals and products thereof
Fish and fish products
Machinery, apparatus and transport
equipment (excl. ships)
9.7
4.7
percentage of GDP
(average 1976-1980)
Main imports in 1 980 (percentage
of total commodity imports):
Ships
Machinery, apparatus and transport
equipment (excl. ships)
1.3
27.0
Raw materials (non-edible) incl.
13.9
4.2
44.5
fuels and chemicals
Base metals and products thereof
27.8
10.2
8.0
THE CURRENCY
Monetary unit: Krone
Note:
Currency units per US$,
average of daily figures:
Year 1980
4.94
Year 1981
5.73
February 1982
5.97
An international comparison of certain basic statistics is given in an annex table.
The annual review of Norway
by the OECD Economic and Development Review Committee
took place on 12th March 1982
INTRODUCTION
Despite its oil riches, Norway has witnessed a marked deceleration in growth over
the last two years, in line with most other OECD countries. This was probably
inevitable, since the growth of non-oil exports was affected by the oil-price-induced
world recession and cautious policy stance in other countries. Moreover, the problem of
inflation - which was above the OECD average in 1 98 1 - has remained in the forefront of
policy preoccupations, ruling out the adoption of stimulatory measures. The labour
market has tended to ease over the last twelve months, but the rate of unemployment -
at some 2 per cent of the labour force in early 1 982 - has remained one of trie lowest in
the area. Stagnating imports and rising oil revenues have contributed to a further
improvement of the current external account, permitting Norway to register one of the
few surpluses in the OECD area last year. In 1982, the economy is expected to recover
somewhat, but the growth of GDP excluding oil and shipping is unlikely to exceed 1 to
1 Vi per cent. The current external balance may shift into deficit due to a pick-up in
imports and falling oil revenues.
Norway, the largest net energy exporter in the OECD area, is one of the few
Member countries which have been able to pursue an ambitious full employment policy
during the last decade. To a large extent, the good macro-economic performance has
relied on oil revenues being used domestically, mainly through higher public
expenditure. However, this development has not been without problems. Lack of
competitiveness has entailed a substantial loss of foreign market shares and a stagnating
level of output in manufacturing industries. And since the economy has adapted to
growing oil revenues, it has become more vulnerable to changes in this trend. Barring
further price shocks, oil revenues over the next few years are now expected to be
significantly lower than envisaged earlier. To ensure a continuing rise in living standards
and, ultimately, the maintenance of high employment conditions, an important task of
economic policy in coming years must therefore be to restore growth in traditional
sectors and non-oil exports.
After reviewing in Part I economic developments in 1981, the policy stance and
short-term prospects, Part II discusses some medium-term policy issues in the light of
the experience of the 1 970s and with reference to the official growth scenarios published
in the Long-Term Programme in early 1981. Particular emphasis is put on the policy
implications which may be drawn from these scenarios, given the recent downward
revision of estimates of oil revenues in the 1980s. Part III focuses on the scope for
reducing the rate of inflation, reviewing the process of income formation and the role of
economic policy. The Conclusions of the Survey are presented in Part IV. The annex to
the Survey contains the usual Chronology of Major Economic Policy Events
I.
RECENT ECONOMIC DEVELOPMENTS AND
SHORT-TERM PROSPECTS
Developments in 1981
The OECD Economic Survey of Norway published one year ago stressed the
foreign balance and inflation as the major areas of uncertainty in the outlook for 1981.
In the event, inflation was much higher and the surplus on current account somewhat
larger than anticipated. The growth of real GDP slowed down roughly as expected - to
some % per cent according to preliminary estimates - reflecting a slight fall in oil and
gas output together with the lagged impact of the second oil price shock. Indeed, even if
Norway is a major oil producer, unless offset by expansionary policies domestic activity
is affected by oil price increases in much the same way as in oil importing countries. This
is due to the adverse effect on traditional exports of slower growth of world trade as well
as the deflationary impact on domestic demand stemming from the full pass-through of
higher oil costs to domestic prices1. Nevertheless, given the favourable impact on the
terms of trade and, hence, on real national income, Norway has clearly benefited from
the rise in oil prices. This was particularly the case in 1979 and 1980; and the
appreciation of the dollar ensured a further improvement in Norway's terms of trade last
year, implying an increase in real disposable national income of some 3V4 per cent.
Table 1 .
Demand, output and national income
1980
billion
Private consumption
1976
Per cent
1977
1978
1979
1980
1981 '
change from previous year ar consranl 1975 prices
134.9
6.1
6.9
-1.6
3.2
2.2
1.3
Government consumption
53.5
7.4
4.9
5.3
3.5
4.7
4.9
Gross fixed capital formation
70.1
9.9
-2.2
-18.1
-5.0
-0.7
16.5
6.3
31.9
12.6
-33.8
-33.0
-18.5
156.7
58.8
Oil sector
Shipping2
2.3
13.2
-44.9
-87.3
225.1
-25.9
Other business sectors
36.5
6.4
15.0
-2.1
-3.2
3.4
Residential construction
13.6
2.5
2.8
9.1
2.4
11.4
3.8
5.4
8.4
-7.4
2.5
7.6
5.5
-3.5
0.8
1.9
6.2
-2.1
-2.2
2.8
2.6
-4.9
Government3
Final domestic demand
Stockbuilding4
Total domestic demand
258.5
7.6
-
_
5.6
0.9
-8.6
266.1
7.6
3.5
-5.6
3.7
4.6
1.0
17.4
-1.3
-0.2
10.5
1.5
-0.5
-0.3
Exports of goods and services
134.9
11.3
3.6
8.4
2.6
2.2
1.0
Imports of goods and services
117.5
12.3
3.4
-13.5
-0.7
3.6
1.9
Gross domestic product
283.5
6.8
3.6
4.5
5.1
3.9
0.7
Disposable national income5
230.6
2.7
0.2
2.2
7.6
10.4
2.7
Oil sector
44.5
52.1
15.6
71.3
21.8
22.9
-1.6
Shipping6
10.3
20.3
4.9
-5.4
-6.1
-0.6
0.3
228.7
4.6
2.9
1.8
4.3
2.3
1.0
Foreign balance4
Memorandum items
GDP in
Mainland Norway
1.
Preliminary estimates.
2.
Ocean and coastal water transportation.
3.
Excluding public enterprises.
4.
Changes in per cent or previous year's GDP.
5.
Defined as net domestic product less nci transfers and factor income to other countries, deflated by the deflator for total domestic demand.
6.
Ocean transportation.
Sources : Central Bureau of Statistics; OECD.
1 . For an analysis of the impact of an increase in oil prices on Norway and other Nordic countries, see
Ian Lienert, "The Macroeconomic Effects of the 1979/80 Oil Price Rise on Four Nordic Economies"
Scandinavian Journal of Economics, 1981. See also the National Budget for 1981.
Real private consumption grew by only VA per cent in 1981. Compared with the
estimated increase in household real disposable income of around 1 3A per cent - mainly
reflecting an increasing number of income and transfer recipients - there thus seems to
have been a small increase in the savings ratio. Retail sales in real terms were rather flat
through most of the year; the growth of consumption was mainly due to higher
expenditure on services. However, purchases of durables seem to have recovered in the
second half of the year, reflecting the retroactive wage and salary adjustments in the
third quarter as well as the flattening out of the fall in real earnings. In constrast to the
sluggish growth of private consumption, public consumption growth accelerated slightly
to 5 per cent (volume). However, excluding military procurements - mainly imported the advance in this component amounted to some 3 per cent, the lowest increase
recorded since the 1960s.
Diagram 1.
Indicators of demand
Seasonally adjusted volume indices, 1970 = 100
130
130
i
RETAIL
SALES
120
120
110
110
100
100
90 ) I 1 I I I I I I I I I I I < I I I I I I 1 1 I I I I I I I I I I I I I I I I I I I I I I I I 1 I
TRADITIONAL EXPORTS AND
160
-
IMPORTS
90
160
IMPORTS2
/
140
_
-
140
-
120
-
100
VA
120
I
J
100
J
220 r-
STOCKS3
220
I \
(not seasonally adjusted)
I
FOR
ISO
S
EXPORTS*J
^"
""
180
*.^~-\
/
/
FCR DOMESTIC MARKET
\
^S-'
\
140
140
^
/
100
100
1970
1971
1972
1973
1974
1975
1.
Excluding oil and gas, ships and platforms.
2.
Excluding ships and platforms.
3.
Domestic goods, excluding transport equipment.
1976
1977
1978
1979
1980
Sources: Central Bureau of Statistics; Norges Bank; OECD, Main Economic Indicators.
1981
Fixed capital formation was rather more buoyant, growing by I6V2 per cent in
volume compared to a small decline in 1980. The sharp rise was mainly due to the
installation of a second production platform in the "Statfjord" oil field in the North
Sea2. Manufacturing investment was also relatively strong, partly as a result of a few
large investment projects in the wood processing and metal sectors. Investment in the
engineering industries continued to expand, reflecting the improved profit situation in
1979 and 1980. The reduction of the investment levy from 13 to 10 per cent may also
have contributed. For manufacturing as a whole, the profit situation improved
somewhat through 1981. However, reflecting some deterioration in the competitive
position, profits in export competing industries declined significantly. Mirroring the
front-loading of grants from the State Housing bank3 the number of housing starts was
exceptionally high in the first half of the year, but has subsequently declined. Despite
improved standards and repair work, investment in dwellings is therefore estimated to
have increased by around 1 per cent. For the third consecutive year, public investment
fell significantly as local authorities gave priority to an expansion of more labour
intensive service activities.
The slowdown in activity entailed somewhat easier labour market conditions.
Nevertheless, as output per employed person fell slightly, total employment continued
to rise. Moreover, since the strong rise in female participation rates observed for a
number of years seems to have come to a halt - probably due to the more modest rate of
growth of public employment - the impact on unemployment was very small. Thus, in
1 98 1 on average, the rate of unemployment (according to labour force surveys) was only
2 per cent, hardly higher than in 1980 (1.7 per cent). With an average rate of
unemployment in the OECD area of 7 per cent in 1981, Norway is thus one of the few
Member countries which have been able to maintain "full employment" conditions.
Contrary to the policies pursued in the mid-1970s, there does not seem to have been any
significant further recourse to selective industrial support measures, although the
planned phasing-out of such schemes has been delayed. Instead, the authorities seem to
have relied more on labour market measures, including training programmes and relief
work.
To reduce inflation the authorities introduced a price freeze from early August
until end-year. An agreement was then reached to suspend the indexation clause
included in the spring wage settlement. Consumer prices nevertheless rose by 13.6 per
cent in 1981 (year on year), or roughly 3 percentage points more than in other OECD
countries. After a significant boost to prices in January 1981 due to publicly
administered price adjustments and indirect tax increases - which raised the index by
2 percentage points - inflation decelerated significantly during the year, remaining,
though, higher than in other countries. To some extent, the slowing down was due to the
freeze, but import prices also exerted a moderating influence whereas higher mark-ups
in domestic trade sectors pulled in the opposite direction. The high rate of inflation early
in the year made the spring wage settlement extremely difficult. Even if the settlement
for public sector employees, which included an index clause, served as a model for other
settlements in the wage round, it was not possible to reach agreement through
bargaining in the private sector. The settlement was therefore ruled by the Arbitration
Board. The contractual increases were rather modest, but since wagedrift was running
at rates of 7-8 per cent through most of the year, hourly earnings in manufacturing
2. Since the platform had been under construction for a number of years, its registration as investment
was statistically offset by a reduction in stocks of broadly the same magnitude. Part of the reserves in the
"Statfjord" field belongs to the United Kingdom (15.9 per cent); a similar share of investment outlays is
recorded as exports to that country in accordance with national accounts principles.
3. 30 per cent of the annual quota was granted in the first quarter, and 55 per cent in the first two
quarters.
10
Diagram 2.
Labour market indicators
Seasonally adjusted
THOUSANDS
32
30
28
26
REGISTERED.
UNEMPLOYMENT
24
22
20
18
16
14
12
UNFILLED
VACANCIES
10
1600 L
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
Source: OECD, Main Economic Indicators.
nevertheless increased by around IOV2 per cent. A ceiling on wagedrift4 for the year to
April 1982 was part of the settlement in the private sector. This might have contributed
to the deceleration in earnings registered in the fourth quarter of the year.
4. The allowed maximum increase in hourly earnings in the local negotiations was fixed at Kr. 1 .50 per
hour, corresponding to roughly 3 per cent of average hourly earnings.
11
Table 2.
International comparison of consumer price developments
Percentage changes from previous period
At average annual rales
12 monlhs
A\ erage
1961-70
10 January
1979
1980
1981
1982
1971-78
United States
2.8
6.7
11.3
13.5
10.4
8.4
Japan
5.8
9.8
3.6
8.0
4.9
3.3
Germany
2.7
5.2
4.1
5.5
5.9
6.3
France
4.0
9.0
10.8
13.6
13.4
13.9
United Kingdom
4.1
13.2
13.4
18.0
11.9
12.0
Italy
3.9
13.0
14.8
21.2
19.5
17.6
Canada
2.7
7.6
9.1
10.1
12.5
11.4
Total of above countries '
3.2
8.0
9.3
12.2
10.0
8.9
Austria
3.6
6.6
3.7
6.4
6.8
6.1
Belgium
3.0
7.8
4.5
6.6
7.6
8.3
Denmark
5.9
9.6
9.6
12.3
11.7
12.3
Finland
5.0
11.6
7.5
11.6
12.0
10.8
Greece
2.1
12.4
19.0
24.9
24.5
20.9
Iceland
11.9
28.7
44.1
57.5
51.6
47. 4!
Ireland
4.8
13.2
13.3
18.2
20.4
23. 3!
Luxembourg
2.6
6.9
4.5
6.3
8.1
Netherlands
4.0
7.8
4.2
6.5
6.7
7.0
Norway
4.5
8.5
4.8
10.9
13.6
12.0
Portugal
3.9
18.2
23.9
16.6
20.0
25.0»
Spain
6.0
15.2
15.7
15.5
14.6
14.2
Sweden
4.0
8.9
7.2
13.7
12.1
9.5
Switzerland
3.3
5.3
3.6
4.0
6.5
6.1
Turkey
5.9
24.1
63.5
94.3
37.6
30.2
Australia
2.5
10.6
9.1
10.2
9.7
11.3*
New Zealand
3.8
11.8
13.8
17.1
15.4
15.7J
Total OECD >
3.3
8.5
9.8
12.9
10.6
9.5
OECD Europe '
3.8
9.9
10.6
14.2
12.3
11.8
EEC
3.6
9.2
9.1
12.3
11.5
11.5
1.
2.
8.7
The country weights used in the aggregate indices are based on private consumption and exchange rates of the preceding year.
Since consumer prices are available only on a quarterly basis, the figure* shown in the last column are calculated as the rate of
change over 4 quarters, to the latest available.
3.
To latest month available.
Source : OECD.
Table 3.
Contractual wage increases and wagedrift ]
Per cent change over a year earlier
Contribution
from :
Contributions from :
Hourly
earnings
Hourly
Contractual
increases
earnings
Wagedrift
Contractual
increases
Waged
1974 Ql
1975 Ql
12.2
4.6
7.6
1979 Q3
1.9
0.3
24.8
16.2
8.6
1979 Q4
1.2
0.0
1.2
1976 Ql
13.2
8.9
4.3
1980 Ql2
3.0
0.0
3.0
1977 Ql
1978 Ql
15.2
9.4
5.8
1980Q22
9.8
5.1
4.7
10.0
2.9
7.1
1980Q32
10.3
5.3
5.0
7.3
1.8
5.5
1980Q41
14.1
5.3
8.8
8.6
1.8
6.8
1981 Ql!
12.9
4.7
8.2
7.5
2.1
5.4
1981 Q22
8.9
1.9
7.0
1981 Q3!
9.9
1.8
8.0
1978
1978
1978
1979
1979
Q2
Q3
Q4
Ql
Q2
6.0
2.1
3.9
4.5
0.4
4.1
12.
For aduli male workers in manufacturing, construction and transport.
Corrected for retroactive payments.
Source : Ministry of Finance.
12
1.6
Diagram 3.
Price and wage developments
Percentage change over same period of previous year
HOURLY WAGES
IN
MANUFACTURING
-
25
WOMEN
-
20
-
15
-
10
-
5
JO
15 r-
-
15
10
-
10
5
-
5
0
-I 0
REAL WAGES'
-5
-10 |_
J -10
1975
1.
1976
1977
1978
1979
1980
1981
Hourly wages for men in manufacturing deflated by the consumer price index.
Source: OECD, Main Economic Indicators.
The surplus on current external account rose to Kr 12 billion ($ 2 billion or 3'/i per
cent of GDP) in 1981, largely due to developments in the oil sector. Oil and gas export
revenue (excluding pipeline transportation) rose by Kr 5.4 billion; and since domesti¬
cally produced crude oil started substituting oil imports, growth of "traditional" imports
decelerated even more than that of "traditional" exports5. Exports of manufactures
roughly stagnated, implying a further small loss of market shares (Diagram 6). This
seems to have been a result of the renewed tendency for the competitive position to
deteriorate together with an unfavourable commodity composition. The growth of oil
revenues was mainly due to the appreciation of the US dollar - prices of North Sea oil
rose by only 5 per cent in dollar terms - whereas oil and gas output recorded a small
decline. Overall, on a custom basis, Norway's terms of trade improved by some 1 0 per
5. "Traditional" merchandise imports include oil imports but exclude ships and oil platforms.
"Traditional" exports refer to merchandise exports excluding oil and gas, ships and platforms.
13
cent whereas the terms of trade for "traditional" goods improved by 6 per cent6. The
deficit on invisibles remained broadly unchanged as growing exports of oil drilling
services were roughly counterbalanced by a rise in interest payments on the foreign debt.
Despite some upward pressure, the krone depreciated slightly in effective terms7. The
current surpluses in 1980 and 1981 have allowed a significant reduction in the net
Table 4.
The current external balance
Kroner billion
Merchandise exports, f.o.b.
1977
1978
1979
1980
1981 '
48.7
57.9
70.0
92.9
105.7
Oil and natural gas
8.)
13.6
22.0
41.4
46.8
Ships
6.9
5.5
4.9
3.8
4.0
Platforms
1.5
4.8
0.5
Direct exports from oil sectors2
1.1
0.4
0.9
0.4
1.9
31.1
33.6
41.7
47.2
52.3
22.7
28.5
29.3
33.3
35.6
72.0
62.0
70.4
84.5
90.4
7.6
3.4
3.5
1.4
1.3
0.5
0.1
Other ("traditional exports")
-
0.7
of which :
Manufactures
Merchandise imports, c.i.f.
Ships
Platforms
Direct imports by oil sector
Other ("traditional imports")
of which :
Manufactures
Trade balance
3.7
0.3
3.4
1.7
1.0
0.8
0.9
59.7
56.5
65.8
82.3
85.4
44.5
40.7
44.8
54.8
58.9
-0.4
8.4
15.3
-23.3
Services, net
-
-4.1
2.8
2.2
6.7
9.1
10.0
Shipping
8.0
8.2
9.5
10.7
11.5
Oil drilling
0.7
0.7
0.6
0.6
1.3
Trade in services by oil sector3
-3.4
-1.9
0.1
1.2
1.2
Foreign travel
-2.1
-2.6
-2.8
-2.8
-3.7
Other
-0.4
-2.2
-0.7
-0.6
-0.3
Interest
-3.7
-5.2
-7.0
-7.5
-7.9
Dividends
-1.0
-2.0
-2.3
-2.1
-2.5
Transfers
-1.6
-1.9
-2.2
-2.3
-2.8
-26.8
-11.0
-5.3
5.5
12.1
-5.2
-2.2
1.9
3.7
Current balance
Memorandum items :
Current balance, per cent of GDP
14.0
Exchange rate, kroner per US S
5.32
Current balance, US $ billion
5.0
5.24
-2.1
5.06
-1.0
4.94
5.73
1.1
2.1
Imports of crude oil and oil products
7.6
7.4
10.7
14.4
13.0
Exports of crude oil, natural gas and oil products
9.6
15.2
25.1
44.5
51.8
Net iradc in oil, natural gas and oil products
2.0
7.8
14.4
30.1
38.8
1 .
Preliminary cstimaies.
2.
3.
Adjustment for investments in oil fields which partly belong to the United Kingdom.
Including transportation in pipelines.
Sources : Central Bureau of Statistics, Okonomisk Utsyn and Monthly Bulletin of Slali&lics.
6.
On a national accounts basis, with 1 975 as a base year, terms of trade for traditional goods improved
by 4 per cent; with 1980 as a base year the improvement was only 1 per cent.
7. According to calculations (using MERM-weights) by the Central bank. Secretariat estimates
suggest a slight appreciation in 1981, due to differences in the weighing pattern.
14
foreign debt, falling from 45 per cent of GDP at the end of 1 979 to some 25 per cent of
GDP at the end of 1981 8.
The stance of economic policy9
Despite concern with high inflation and external competitiveness, the government
budget continued to exert a stimulatory impact on domestic demand in 1 98 1 . Excluding
oil revenues, which mainly represent taxes on foreign rather than domestic consumption
Table 5.
General government revenue and expenditure
Accrual basis ; including investment outlays by public enterprises
Kroner billion
Revenue,
:venue, total
roiai
119.54
jiy.D4
149.31
J4y.ji
167.95
to/.yj
184.42
184.4/
Direct taxes and social security contributions, households
43.61
50.17
53.45
61.21
Employers' social security contributions
18.80
10 °"
21.18
"" 10
23.61
"
26.43
-.**-.
Direct taxes, business excluding oil sector
3.48
3.83
4.22
4.14
Direct taxes, oil sector
8.21
20.30
22.30
21.80
Levies on oil and gas production
Indirect taxes
1.71
4.20
5.08
5.18
37.89
42.61
49.91
54.24
5.84
7.02
9.37
11.42
Property income
Current expenditure, total
108.57
125.33
145.38
162.09
Public consumption
46.73
53.56
62.03
70.54
Transfers
38.83
44.10
51.76
58.59
Subsidies
15.39
17.99
20.34
21.58
7.62
9.68
11.25
11.38
Savings
10.97
23.98
22.57
22.33
Investment
12.31
12.68
12.44
12.19
-1.34
11.30
10.13
10.14
-11.26
-13.20
-17.25
-16.84
-4.7
-4.7
-5.4
-4.7
Interest on public debt
Surplus before loan transactions
Surplus before transactions excluding oil revenues
Idem., per cent of GDP
1.
Preliminary estimates.
2. National Budget, October 1981 ; excluding policy presented by the new Government.
Sole : The date presented in this Table are according to the National Budget. They include capital investments in Stale enterprises but
exclude net operating surplus of local government enterprises. This Table therefore differs from the national accounts (sec Tabic E in the
Statistical Annex) which exclude the former but include the latter.
Sources : Central Bureau of Statistics and Ministry of Finance.
8.
The net external debt has developed as follows (end of year; billion kroner):
1975
Private sector
1976
1977
1978
1981'
1979
38.3
51.3
67.4
71.3
73.0
75.4
14.4
20.4
27.8
29.5
28.2
22.9
9.5
13.1
19.5
19.3
18.8
18.7
14.4
17.8
20.1
22.5
26.0
33.8
of which:
Oil companies
Shipping sector
Other
Treasury
4.5
8.4
15.0
25.4
28.6
25.5
State banks
1.3
2.2
5.9
11.1
16.0
16.5
Municipalities
3.5
4.0
4.8
5.8
6.9
7.4
-12.4
-11.5
-8.7
-14.6
-20.9
-31.5
Central Bank
Total
35.2
54.4
84.4
99.0
103.6
93.3
81.0
Per cent of GDP
23.7
31.9
44.1
46.5
43.4
32.9
25.3
1.
Secretariat estimates.
Sources: Central bureau of Statistics; OECD.
9.
For a detailed account of policy changes, see Chronology of Major Economic Policy Events.
15
of Norwegian oil products, the deficit for the consolidated public sector rose to some
5'/2 per cent of GDP against 4% per cent of GDP in 198010. Part of the deterioration was
anticipated as a result of the policy package accompanying the budget proposals for
1981: cuts in direct taxes and higher child allowances were only partly offset by
increases in indirect taxes and reduced subsidies. Smaller tax cuts and adjustments of
pensions in connection with the 4-month price and income freeze in late 1981 also
tended to raise the deficit. Automatic effects seem to have played a role as well, due to
the higher than expected rate of inflation. Thus, despite strong fiscal drag in the personal
income tax system, the expenditure side of the budget seems to react faster than
revenues to an acceleration in inflation. This particularly concerns transfers which rose
by 1 7 per cent instead of the 13.7 per cent anticipated in the original budget proposals.
Subsidies and public consumption in nominal terms also rose by roughly 2 percentage
points faster than planned. By comparison, total budgetary receipts rose by only 1 V* per
cent more than originally budgeted.
The conservative Government which took office after the September general
elections plans to keep the budget deficit roughly unchanged in 1982, implying a
somewhat less expansionary stance than in 1981. The original budget proposals
(presented by the previous Government) were modified in several respects before final
adoption by Parliament. This concerned in particular cuts in direct taxes to neutralize
fiscal drag11, roughly offset by various cuts in transfers and expenditure on goods and
services. The 1982 budget implies a significant deceleration in the rate of growth of
public consumption from some 5 per cent in 1981 to 3 per cent in 1982 (volume).
However, this is exclusively due to large swings in military procurements. Excluding
defence expenditure, public consumption is expected to grow by 3'/2 per cent against
3.1 per cent in 1981. This component of public expenditure will thus continue to grow
considerably faster than in most other OECD countries. By contrast, the fall in public
investment outlays is expected to continue (5'/z per cent decline in 1982; 8V4 per cent in
1981), partly as a result of measures taken to curb the growth of local government
outlays12.
The growth in monetary aggregates in 1981 (M2 increased by some 12 per cent)
turned out markedly stronger than envisaged in the National Budget (10 per cent).
Supply of liquidity from the banks and the government budget contributed some 22 per
cent to growth of money supply, partly offset by the foreign exchange transactions of the
private sector. In the first part of the year, the liquidity creation by the banking system
was particularly strong, due to rapid expansion of lending and purchases of private
bonds13. Credit policy was tightened successively through the year, as bank lending to
wage earners, self-employed and the municipalities was curtailed. As from August,
private credit institutions were no longer allowed to issue bonds to finance their lending
activities. Moreover, the primary reserve requirement was raised in November14.
10. It should be noted that the deduction of all oil revenues from government receipts to obtain an
"internal demand effective" budget deficit tends to exaggerate the expansiveness of fiscal poicy, since oil price
increases, directly or indirectly, also hit Norwegian consumers.
11. The changes in taxation comprise full inflation adjustment of tax brackets, an increase in the tax
allowance for children and the re-introduction of a general rule limiting total income and wealth taxes to
80 per cent of assessed income. Tax rules for business have also been modified, mainly through higher
depreciation allowances.
12. For 1982, the objective is to restrict the growth of real expenditure to l3/4 per cent. According to
preliminary figures local government expenditure declined by 'A per cent in real terms in 1981.
13. The bond investment obligation implied that 30 per cent of the rise in most bank deposits should be
placed in government or private bonds. The banks have preferred to invest in private bonds despite' the
1 percentage point rise in the interest rate on government bonds both in January and May 1 98 1 14. See last year's Survey on Norway for a detailed review of monetary instruments and the
institutional setting.
16
Table 6.
Anticipated and actual developments in money supply
Per cent change during year; excluding oil taxes
1978
1979
*
A.
From domestic sources
23.8
1980
1981
*
b
18.6
19.0
17.8
17.5
19.5
16.4
18.3
19.6
20.4
17.8
21.4
17.7
18.6
of which :
Central government ;
Revenue balance
Lending transactions
Private banks
B.
3.3
4.2
3.6
4.1
4.6
4.5
5.9
5.1
6.5
5.0
5.6
5.7
5.7
9.8
9.5
8.4
9.2
7.9
6.8
6.2
7.1
6.1
5.2
5.3
4.4
5.7
8.5
5.5
5.3
5.8
4.2
7.0
5.1
6.2
7.4
7.8
7.6
10.6
7.6
7.2
12.3
-10.6
-7.6
-10.5
-7.0
-5.9
-6.6
-7.9
-6.7
-10.3
-8.1
-9.7
-7.6
-8.7
11.5
8.0
11.4
7.3
10.5
13.6
9.8
10.4
12.9
10.1
9.7
11.7
Foreign exchange transactions
of the public
C.
5.3
10.0
Money supply (A + B)
a
b
National Budget (published in October of preceding year).
Revised National Budget (published in April each year).
c
Outcome.
1 .
Preliminary estimates.
2.
National Budget as approved by Parliament in December 1981 (reflecting changes made by the new government).
Source : Bank of Norway.
10.1
9.9
Supply of credit outside the regulated credit market seems to have increased
substantially through the year. Strong demand for credit seems to have entailed some
upward pressure on interest rates. The coupon rate on long-term state bonds was raised
on two occasions (in January and May), and again in January this year, to 13 per cent
for 10 year bonds compared to only 10 per cent at the end of 1980. Each time, these
increases triggered similar adjustments in the interest rates on private and municipal
bonds. In the face of decelerating inflation in the course of last year, the increase in
long-term real interest rates has been even more pronounced. As the most recent rise in
the interest rate on government bonds was not accompanied by a general rise in other
interest rates, the real interest rate structure has also changed substantially since
197915.
The tight credit policy is expected to continue in 1 982, as demand for credit shows
no sign of weakening and as liquidity creation by the government remains substantial
the need to restrict the supply of bank credit consequently persists. Given full tax
deductibility for interest payments, credit demand from the household sector constitutes
a particular problem. Continuing tight direct credit controls in one form or the other will
therefore be difficult to avoid. Nevertheless, higher interest rates on government bonds
should make these more attractive. The recently announced reduction in the bond
investment obligation ratio (from 30 per cent to 20 per cent for banks in Southern
Norway) is likely to entail some decline in private emissions and should also help to ease
the problems of excessive liquidity creation over the bond market as experienced last
year. The authorities expect a money supply growth of some 10 per cent this year, or
broadly in line with growth of nominal GDP excluding oil and shipping. The Central
Bank has, in its advisory capacity, presented the view that domestic money creation in
excess of the target based on the National Budget should be neutralized, inter alia
through open market operations. However, the credit budget remains the main
framework through which monetary policy is implemented. It should be noted that the
credit budget is normally revised in April or May, together with the presentation of the
Revised National Budget.
Prospects for 1982
On present policies and assuming no rise in nominal oil prices during the remainder
of 1 982, the latest Secretariat forecasts for the OECD area suggest a gradual but slow
recovery of activity through the year with* the average rate of growth of GDP
nevertheless slightly lower than in 1981. Whereas some of Norway's trading partners
were relatively hard hit by the 1980/81 recession - including the United Kingdom and
Denmark - the regional composition of Norwegian exports seems to become more
favourable in 1982. The trade-weighted average rate of growth of GDP in trading
partner countries might thus accelerate to some 1 to 1 Vi per cent compared with a fall of
Vi per cent last year. The growth of imports of manufactured goods in Norwegian
markets is thus expected to pick up from less than 1 per cent in 1 98 1 to some 3'/2 to 4 per
cent this year. However, if the competitive position were to deteriorate further in terms
of costs and prices, Norway may continue to lose market shares in line with the
experience in recent years. Exports of manufactures may therefore not grow by more
than 1 to 2 per cent despite a recovery of export orders since mid- 1981.
The real income loss for most wage earners in recent years, the decentralised nature
of this year's wage round and an eventual catching up of consumer prices after the
15.
Banks' long-term lending rates have not been allowed to increase, whereas their short-term rates
were raised on average by 1 percentage point in May 1981. Interest rates on most loans from the State banks
were increased by 1 percentage point both in January 1981 and in January 1982.
18
expiration of the 4-month price freeze introduced last August suggest a risk of fairly
high wage increases in 1 982. However, even if the labour market is expected to remain
tight, the small increase in unemployment registered over the last eighteen months or so
- if maintained - should help to limit wagedrift. And the recently announced tax cuts
could also have a moderating influence. In view of these uncertainties, the forecast
assumes that wage increases will not be significantly different this year from those in
1 98 1 . Given the clear trend towards a deceleration in the growth of unit labour cost in
Norway's main trading partners, on the basis of present exchange rates such an
assumption would imply a substantial deterioration in the country's international
competitiveness. To avoid such a deterioration, wage increases in Norway would have to
be limited to some 5 to 6 per cent.
Domestic demand may remain relatively weak. Household real disposable income
could increase by roughly 2 per cent, mainly as a result of a growing number of income
and transfer recipients and a continuing tendency for pensioners' living standards to
Table 7.
Short-term prospects
1980
Kr. billion
1980
1981 '
I9822
er cent change from previous year at constant 1 973 prices
Demand and output
134.9
2.2
1.3
1
53.5
4.7
4.9
Gross fixed investment
70.1
-0.7
16.5
3 3
-5 <?
Final domestic demand
258.5
1.9
6.2
7.6
2.6
-4.9
Total domestic demand
266.0
4.6
1.0
Exports of goods and services
134.9
2.2
1.0
Imports of goods and services
117.5
3.6
1.9
17.4
-0.5
-0.3
GDP
283.5
3.9
0.7
GDP excluding oil and shipping sectors
Industrial production4
228.7
2.3
1.0
1
43.7
1.3
-1.3
1
Private consumption
Public consumption
Stockholding >
Foreign balance3
-
l
;
2 i
2
-
4 i
-1
1
-
:
Per cent change
Prices and costs
GDP deflator
14.3
14.6
7
9.8
13.9
10
Consumer prices (implicit deflator)
1981
1982
Volume
Price
-1.5
14.1
-1
-2
-5.8
23.4
-5
-12
Volume
Price
Balance of payments
Exports of goods5
of which :
Oil and gas
Manufactured goods
7.7
H
6Î
-0.6
4.0
5
5
2.9
5.0
6
6 i
-
Imports of goods5
of which :
Manufactured goods
S billion
Trade balance (fob/fob)
Invisibles, net
Current balance
1.
Preliminary estimates.
2.
Secretariat forecasts.
3.
Changes in per cent of previous year's GDP.
4.
Manufacturing.
5.
Customs basis.
Source : OECD.
19
3.1
0.9
-1.0
-1.4
2.1
-0.5
improve due to built-in effects of earlier legislation. But the expected tendency for real
interest rates to rise as inflation decelerates might generate a further increase in the
savings ratio. Recent investment surveys suggest a significant fall in business investment
this year, partly due to the completion of a few major projects last year. High and rising
real rates of interest and deteriorating profitability in export competing sectors in both
1981 and 1982 could pull in the same direction. Investment is also expected to decline
somewhat in the oil sector, after the towing out of the second major platform for the
"Statfjord" field. This effect also shows up in stockbuilding, since the work on the
platform until its installation was recorded as an increase in stocks. Including this swing,
total domestic demand might thus rise by 2 per cent.
With a substantial increase in purchases of ships and platforms abroad and
continuing high investments in oil production platforms and drilling rigs16 imports can
be expected to pick up. Manufactured imports could grow by as much as 6 per cent
whereas imports of crude oil and refined oil products are expected to continue to fall in
step with growing shipments of crude oil directly from the Norwegian part of the North
Sea to domestic refineries. The shift towards domestically produced oil will have a
negative impact on oil exports which will also decline due to an expected reduction in
output, reflecting a lowering of reserve estimates for the "Ekofisk" area. On that basis,
real GDP could roughly stagnate in 1 982; excluding oil and shipping real GDP might
increase by 1 14 per cent, only slightly more than last year. Nevertheless, on the
assumption of relatively low growth of productivity and some increase in part-time work,
the rate of unemployment will probably not exceed 2 per cent on average for the year or
about the same as in 1981 17.
The development in the terms of trade could be somewhat less favourable than over
the last couple of years. Oil prices have fallen in recent months and on the basis of the
usual technical assumption of constant exchange rates and no increase in nominal oil
prices for the remainder of 1 982, oil and gas export prices would decline by some 1 0 to
1 5 per cent this year measured in kroner. Reduced demand for tanker services has
already led to an increase in laid up tonnage, suggesting a moderate development in
freight rates for tankers, at least in the short term. Assuming a roughly parallel
development of non-oil merchandise export and import prices, the overall terms of trade
could thus deteriorate by 5 to 6 per cent, implying a decline of roughly 2Vi per cent in
real national disposable income. This would result in more than a halving of the trade
surplus which could bring the current account back into deficit after a surplus of
Kr. 12 billion ($ 2 billion or 3'/i per cent of GDP) in 1981.
II.
MEDIUM-TERM POLICY ISSUES
A striking structural feature of the Norwegian economy over the last 1 0 years or so
has been the growing importance of the oil sector, with the country becoming the largest
net energy exporter in the OECD area. Increased North Sea oil and gas revenues
generated by rising domestic production and higher international energy prices have
facilitated the maintenance of a relatively good economic performance. In spite of the
16. The ongoing construction of a third production platform for the Statfjord field will have a major
impact on imports in both 1982and 1983. Furthermore, order books with Norwegian shipyards suggest that as
much as 8 drillings rigs will be delivered in the course of 1 982.
17.
These data refer to labour force surveys. Registered unemployment may be lower than 2 per cent
for 1982 on average.
20
weak international environment, which has adversely affected demand for Norwegian
non-oil exports and shipping earnings, real incomes have been rising at a fairly rapid
rate, at least until recently. Unemployment has remained very low, reflecting the high
priority accorded to maintaining full employment, and over the last two years the
current external account has run a surplus.
But the development of energy resources, and the way in which revenue has been
used, have also had negative implications for the economy. As already analysed in
previous OECD Surveys, the rapid growth of public consumption, transfers and
subsidies of all sorts, has reduced labour mobility and slowed down structural
adjustment and productivity growth. Shortages of labour, buoyant income expectations,
and demonstration effects stemming from high wages and salaries in the oil sector, have
meant that inflationary pressures have been strong and difficult to control and that the
competitive strength of the exposed sectors has been significantly reduced. Moreover,
the expansionary fiscal policy stance maintained over a number of years has created
problems for economic management as the burden of anti-inflationary policy has fallen
heavily on monetary restraint.
In view of the considerable uncertainties attached to future oil revenues, the greater
importance assumed by the oil sector has increased the vulnerability of the Norwegian
economy. As suggested by recent downward revisions of oil revenue prospects for the
first half of the 1 980s, continued strong expansion of the sheltered sectors based on
rapidly growing oil and gas revenues may not be possible, unless the already high level of
foreign debt were to be further increased. In any case, for any given assumption about oil
revenues, adjusting the domestic economy fully to the upper limit would involve obvious
risks. Improving the competitiveness of exposed industries must therefore constitute an
important policy aim if a satisfactory employment situation is to be maintained. After a
brief review of recent and prospective developments in the oil sector, the following
section is devoted to an analysis of the adjustment of the economy to rising oil revenues,
both in relation to past experience and to possible scenarios. Policy implications will
finally be discussed.
The oil sector, past trends and prospects
During the last 4 to 5 years the oil sector has become a fully integrated part of the
Norwegian economy. Exploration on the continental shelf was initiated in 1 966, the first
discoveries were made in the late 1960s and production started in 1971. After 1977 a
strong expansion took place, with the first two gas pipelines (to Emden in Germany and
St. Fergus in Scotland) being put into operation. In late 1979 oil production came on
stream from the first platform at the "Statfjord" field, the largest development project
so far18. Total production consequently rose from 16 Mtoe in 1977 to some 49 Mtoe in
1980 and 1981. With domestic consumption of oil products amounting to roughly
8.5 Mtoe19, the country was left with an oil and gas surplus of approximately 40 Mtoe,
the largest among OECD Member countries. Indeed, for the sake of illustration, net
energy exports in 1981 were sufficient to cover the combined requirements of Denmark
and Sweden20.
1 8. The "Statfjord" field is situated on the borderline between the British and Norwegian parts of the
North Sea; 1 5.9 per cent of reserves belong to the United Kingdom.
19. In 1980, final energy consumption was composed as follows:
Crude oil and petroleum products
52 per cent
Solid fuels
Hydro-electric power
8 per cent
40 per cent
20. Nevertheless, with a daily crude oil production of 500,000 barrels in 1981, Norway covered only
1 lA per cent of the OECD area's oil requirements. For natural gas production represented roughly 3 and 1 1 per
cent of requirements in the area as a whole and in OECD Europe respectively.
21
Diagram 4,
Oil and gas fields on the Norwegian continental shelf
i Existing pipelines
o
35.3
Pipelines to be
constructed
0 Field development
Murchison
O Fields under consideration
Odin
SHETLAND V
NEFrigg
Frigg
Frigg
ORKNEYS
Heimdal
f
lor
FERGUS
Tor
BAY
Ula
Cod
Albuskjrt
Ekffisk
W Ekofisk
Valnal
Ekolisk
Edda
1.»
++
,»
Hod
Source: Ministry of Petroleum and Energy.
In 1 98 1 , the sector's contribution to GDP amounted to as much as 1 5 per cent, and
oil and gas accounted for roughly 30 per cent of total export earnings. Allowing for
depreciation, dividends to foreign interests and the cost of servicing the oil sector's
foreign debt, the sector's share of net national disposable income amounted to some
1 3 per cent, of which 65 per cent accrued to the government in the form of taxes,
royalties, etc. Roughly one-third of total government tax receipts thus came from the oil
sector, allowing the total budget balance to show a surplus of VA per cent of GDP.
The direct employment impact of the growing oil sector has been relatively modest.
In mid- 1981, only 1 0 000 persons (roughly lh per cent of the labour force) were engaged
in exploration, drilling and production of oil and gas. However, including various service
activities, construction of platforms and supply vessels, as well as construction and
operation of new refineries and petrochemical industries, total employment within the
"oil sector" amounted to almost 40 000 persons or some 2 per cent of the labour force.
To this may be added the employment effects of deliveries of platform components, etc.,
by other industries. Nevertheless, even including these indirect effects, the manpower
requirements are relatively small.
Estimates of oil revenues over the next few years have recently been revised
downwards quite significantly; in real terms these are now expected to be lower in 1985
than in 1981. In addition to a revision of estimated reserves in the "Ekofisk" area,
22
Table 8.
Oil and gas production and contribution to national income
1981 '
1975
1976
1977
1978
11.96
12.88
14.26
14.06
21.90
36.05
5.25
5.46
5.32
5.23
5.06
4.93
5.73
62.80
70.32
75.86
73.53
110.73
177.73
217.74
9.3
13.6
16.0
31.1
39.8
49.5
49.3
9.3
13.6
13.4
16.9
19.0
24.4
23.4
2.6
14.2
20.8
25.9
25.9
8.1
8.3
8.1
8.5
1980
1979
Prices and output
Price of North Sea oil (dollar/barrel)
Exchange rate (kroner/dollar)
Price of North Sea oil (kroner/barrel)
Output (Mtoe)
38.00
of which :
Oil
+ NGL
Gas
-
7.3
Domestic demand oil and gas (Mtoe)
-
8.0
8.3
Billion kroner
Contribution to national income
Oil sector GDP (at market prices)
3.59
6.43
7.77
13.54
22.1
42.4
51.9
Net interest and dividends to other countries
0.63
1.00
1.59
2.92
3.6
3.9
4.8
Depreciation
Contribution to national disposable income
at market prices
1.15
2.05
3.06
3.73
4.5
5.2
4.9
1.81
3.38
3.12
6.89
14.0
33.3
42.2
Indirect taxes (cash basis)
0.21
0.81
0.70
1.26
1.7
3.7
5.4
1.60
2.57
2.42
5.63
12.3
29.6
36.8
Direct taxes (cash basis)
0.
1.15
2.42
2.55
4.9
14.9
21.9
Total revenue (cash basis)
0.21
1.96
3.12
3.81
6.6
18.6
27.3
49.8
Contribution to national income
at factor prices
Government revenue
Memorandum items :
Export earnings
3.50
7.04
8.60
14.84
23.9
43.9
Crude oil import bill
2.66
4.21
4.63
4.34
5.5
7.7
6.4
Gross investments
6.71
9.20
12.07
9.10
6.5
6.2
15.9
1.
Preliminary estimates.
Source : Ministry of Finance.
Table 9.
Oil revenue projections 1980-2000
1983
Production of crude oil and natural gas
Long-term programme 1978-1981
70
Long-term programme 1982-1985
50
60
50
55
Revisions, January 1982
75
90
Billion kroner, 1980 prices
Government income '
Long-term programme 1982-1985
Revisions, January 1982
1.
25
33
25
20
49
87
Adjusted for the margin of uncertainly mentioned on page 25. These estimates were finalised before the price cuts announced in
February and March 1982.
Sources : Planning Secretariat, Long-Term Programme 1982-3985; Ministry of Petroleum and Energy.
technical difficulties and various implementation delays have reduced the estimated
level of output by some 5 Mtoe annually in the 1982-85 period compared with the
previous estimates published in early 1981 in connection with the 1982-85 Long-Term
Programme. Price estimates have also been reduced. With an upward revision of
23
Diagram 5.
Estimated output from fields in production
or under development
70
ù/po
60 (-
°»*
*"ù
50
t-Ost
40
-
30
-
20
-
30
20
EKOFISK
10
AREA
-
10
0 L
0
1975
1.
1980
1985
1990
1995
2000
Murchison, North-East Frigg, Odin and Ula.
Source: Ministry of Petroleum and Energy, Fact Sheet, October 1981.
deductible costs and some changes in calculation methods and various other assump¬
tions underlying the estimates, tax revenue from oil in 1985 had been revised down by
some 40 per cent already before the latest price reductions early this year (Table 9).
These revisions contrast somewhat with recent announcements of new discoveries,
including a large gas discovery21 and the promising results of test drillings north of the
62° parallel. However, production from new fields - apart from those shown in
Diagram 5 - is unlikely to come on stream until the 1 990s. Even then, a major effort will
be required if production is going to rise from the present level of 50 Mtoe to, for
21.
In the so-called "31 area" (see Diagram 4).
24
instance, a level of 90 Mtoe, the so-called "moderate level of activity"' suggested by the
authorities in the early 1970s (Diagram 5).
The most
recent downward
revision
of oil
revenue
estimates
illustrates
the
particular uncertainties attaching to the offshore oil industry. It is not the first time that
the expected production levels have been lowered. For instance, the 1978-1981
Long-Term Programme anticipated a production level in 1 980 of 70 Mtoe; the outcome
was only 50 Mtoe. Production shortfalls have been the result of technical difficulties and
delays in the development of oil and gas fields as well as unexpected reservoir behaviour.
Reserves, however, may prove larger than currently estimated, depending on future real
oil prices and exploitation costs22. Given the small number of production outlets, the risk
of lower-than-expected production levels remains; a single accident could cause a
considerable loss in revenue. So far, the two oil price shocks have more than
compensated for production shortfalls but the future price of oil is also difficult to
forecast. Overall it would appear that the margin of uncertainty relating to future oil
revenues is substantially larger than in the case of traditional export earnings. In official
economic planning, the authorities attempt to take this into account by allowing for a
certain margin of uncertainty as regards gross revenue23.
Adjustment of the economy to rising oil revenues
The problems raised by the integration of the oil sector into the Norwegian
economy have been analysed in detail in previous Surveys. A decline in the share of
traditional industries in gross domestic product was probably unavoidable as a result of
the growing energy sector and the domestic use (absorption) of revenues from oil and
gas. Such a development was indeed anticipated by the authorities at an early stage.
However, the rapid speed of absorption and its pattern, may have rendered the situation
of the traditional sectors more difficult than necessary, thus increasing the vulnerability
of the economy. The strong growth of public services, transfers and subsidies to ailing
industries24, has led to excessive pressures in product and labour markets which, in turn,
have fuelled inflation and constrained the expansion of the most competitive enterprises.
The significant swing in the government budget balance, excluding oil revenues, (from a
surplus of 3.9 per cent of GDP in 1 973 to a deficit of 5.6 per cent in 1 98 1 ) indicates that
a large share of oil revenues has been used or absorbed through increased domestic
demand - a development also suggested by the small current external surplus in relation
to gross earnings from oil and gas exports. Whereas the marginal rate of absorption in
recent years has been around only 50 per cent, the cumulated use of oil revenues still
clearly exceeds accrued earnings, as illustrated by continuing large foreign indebted¬
ness25.
The emergence of underlying imbalances was particularly striking during the
4 years to 1977. Given expectations of rapidly rising oil revenues, counter cyclical
22.
Official reserve estimates remain at some 4-5 000 Mtoe for the area south of the 62° parallel. So far,
no official estimates have been made for the area north of the 62° parallel. It should be pointed out that
economically feasible reserves may be lower than estimates based on technical criteria. Thus, in addition to
authorisation by Parliament, the decision by oil companies to develop new fields strongly depends on expected
real oil prices and projected cost developments. The current cost level in the North Sea may be up to 20-30
times higher than typically in the Middle East. It should also be noted that costs vary significantly with the
depth of the ocean and geological as well as climatic conditions.
23. The reduced revenue figures are used for calculating both export and tax receipts for short- and
medium- term forecasting purposes. The most recent official projection assumes a margin of 15 per cent in
1982 and 20 per cent in 1983-85.
24. The "defensive" industrial policy pursued throughout the 1 970s is somewhat paradoxical. It implies
that oil revenues, in part, have been used to diminish the structural impact of the development of the country's
energy resources.
25.
See footnote 8.
25
policies were followed in order to maintain full employment conditions. In the short run
this attempt to offset the deflationary impact of higher oil prices on demand and activity
was relatively successful, with real GDP rising by 21 per cent during the period - more
than twice as fast as the OECD average26. However, the policies pursued became too
expansionary, leading to a large deterioration of external competitiveness and export
performance. With strong demand pressures and soaring imports, and as production of
North Sea oil and gas came on stream later than envisaged, the current external deficit
reached unacceptable levels (12 per cent of GDP in 1 976, 1 4 per cent in 1 977). But even
after the re-orientation of economic policy as from end-197727 problems of economic
management have remained. In spite of a significant improvement, the competitive
position has remained less favourable than in the early 1 970s (Diagram 6). The incomes
and price freeze during the 15 months to end- 1979 was efficient, as long as it lasted, consumer prices rising by only 4.8 per cent between 1 978 and 1 979 - but the subsequent
re-entry phase proved problematic. As a consequence, wage and price increases
accelerated sharply in 1980 and 1981 and the competitive position deteriorated again.
At the end of 1 98 1 a new price freeze was imposed - for a four month period - together
with a suspension of the index clause in the wage agreement (see Part I).
The lack of success with anti-inflationary policies can largely be explained by the
expansionary impulses on demand and activity emanating from the government budget.
Indeed, despite intentions to tighten fiscal policy, the budget deficit excluding oil
revenues has continued to widen, largely due to the rapid growth of subsidies and
Table 10.
Government budget deficits in selected OECD countries
General government financial balances in per cent of GDP at market prices
1977
United States
+ 0.6
-1.0
Japan
+ 0.5
-3.8
Germany
+ 1.2
-2.4
France
+ 1.0
-0.8
United Kingdom
-2.8
Italy
-8.5
Canada
Major 7 total
Austria
Belgium
Growth of real GDP
Change
Level
1973
1981 '
1973-77
1977-81
1973-77
1977-81
-0.7
-1.6
+ 0.3
9.4
9.1
-3.6
-4.3
+ 0.2
12.3
20.0
-4.4
-3.6
-2.0
6.9
8.8
-2.4
-1.8
-1.6
12.2
9.2
-3.4
-2.3
-0.6
+ 1.1
3.3
1.2
-7.9
-9.4
+ 0.6
-1.5
8.3
12.0
+ 1.0
-2.6
-0.1
-3.6
+ 2.5
13.4
10.4
+ 0.1
-2.3
-2.5
-2.4
-0.2
9.3
10.3
0
-2.4
-1.2
-2.4
+ 1.2
13.0
8.7
-3.3
-5.7
-12.7
-2.4
-7.0
9.0
6.7
5.8
0.2
-6.5
-5.6
-6.3
7.1
3.6
Netherlands
+ 1.1
-1.5
-6.5
-2.6
-5.0
10.5
3.1
Sweden
+ 4.1
+ 1.9
-4.9
-2.2
-6.8
6.8
6.9
Norway2
+ 3.9
-2.3
-5.6
-6.1
-3.3
Denmark
21.3 (14.6)
14.2 (9.
1.
Estimates and forecasts based on Economic Outlook, No. 30, December 1981.
2.
Budget balance excluding oil revenues. Numbers in brackets show growth of GDP excluding oil and shipping sectors. The defi¬
nition used for Norway corresponds to that used in the National Budget (see also Table 5).
Source : OECD.
26.
Over the same period, the volume of total domestic demand rose by 24 per cent in Norway
compared with less than 7 per cent for the OECD area on average.
27. As described in earlier Surveys, the measures taken comprised tighter monetary policy, a
devaluation of the krone within the "Snake" arrangement (in February 1978) and an incomes and price
freeze, effective from September 1978 through end- 1979. Norway's participation in the European currency
arrangement was subsequently discontinued (as from December 1978). Instead, the krone was pegged to a
basket of currencies of Norway's most important trading partners.
26
transfers which to a large extent reflects built-in effects of costly reforms and
commitments made in the early and mid-1970s. Public consumption has also continued
to grow at relatively high rates, and faster than typically elsewhere. Although the tax
burden (tax revenues as a proportion of GNP) has remained one of the highest in the
OECD area, the widening of the budget deficit (excluding oil revenues) over the last
four years has been substantially larger than in most other OECD countries28.
The disappointing performance of Norwegian manufactured and other "tradi¬
tional" exports is probably not unrelated to the pattern of resource allocation although
Diagram 6.
External competitiveness and export performance
Indices, 1970 = 100
140
| 140
RELATIVE
130 |
UNIT
LABOUR
COSTS
Manufacturing industries
-
130
120
-
120
110
-
110
100
-
100
l_
_l
90
200 p
90
-1
200
180
-
MERCHANDISE
-
OMu indices)
EXPORTS
180
FOREIGN MARKETS
160 |-
160
\
MANUFACTURED GOODS'
140
./"A
120
TRADITIONAL
EXPORTS
-
140
-
120
\w^
100
100
L
_I
00
-| 100
EXPORT PERFORMANCE
INDEX
95
-
95
90
-
90
85
-
85
80
-
80
75
-
75
_J
70
70
L
1970
1971
1972
1973
1974
1.
Excluding ships and platforms.
2.
Forecasts.
1975
1976
1977
1978
1979
1980
1981
19822
Source: OECD.
28. For the major seven OECD countries, the combined budget deficit in relation to GDP was hardly
higher in 1981 than in 1977. However, a few smaller countries, including Denmark and Sweden, have
experienced even faster deteriorations in their budget balances than Norway (see Table 10).
27
other factors may also have contributed. After a small gain in 1978, and despite the
improvement in relative cost competitiveness, the Norwegian share of imports of
manufactured goods of principal trading partners showed renewed decline from 1979 to
1981 (Diagram 6). Previous Surveys and other studies have pointed to an unfavourable
commodity composition, insufficient profit levels, low growth of productivity and a lack
of adjustment of the industrial structure strongly related to the defensive industrial
policy approach. The increase in deliveries of domestically-produced investment goods
to the oil sector has also tended to hamper exports, a development which should,
however, be viewed as a positive feature. Nevertheless, it is important to note that
Norway is one of the few OECD countries (together with Sweden and the United
Kingdom) where the present level of production of manufactures is lower than the
1973/74 peak (Diagram 7). Overall, traditional sectors would probably have fared
better if the degree of absorption of oil revenues had been smaller and the pattern
different, in particular if there had been room for tax cuts as an alternative to higher
public expenditure. Given the poor export performance and the constraints on policy
imposed by the problem of inflation, the growth performance of Norway (excluding
production of oil and gas) has therefore been rather similar in the most recent period to
that of the average OECD country.
Diagram 7.
Production in manufacturing industries
Seasonally adjusted indices, 1970 = 100
I»70=100
1»70=]O0
140
140
136
136
132
132
OECD
TOTAL
*
A
128
i
i
!
i
i
124
,-A
/
120
.
'\
/
r
t
\
\
\
124
l~\
EUROPE
120
J
'^
\
OECD
128
\
\
»
/
s
t
116
116
t
I
/
1
/
t
;
112
112
i
/
NORWAY
i
1
i
i
108
i
/
V
108
i
J
/
104
100
104
"
100
96 L
J
1970
1971
1972
1973
1974
1975
1976
Source: OECD, Main Economic Indicators.
28
1977
1978
1979
1980
1981
96
Some medium-term scenarios
The macro-economic performance of Norway in the years ahead, as well as the
growth of real national income and the room for further improvements in living
standards, will depend on the future trend in oil and gas revenue and developments in the
non-oil economy, notably the exposed sector. Among several crucial factors determining
the outlook for "Mainland" Norway, two may be of particular importance. The first is
the growth of the world economy, which most observers agree is likely to remain
moderate and not very different from that experienced during the second half of the
1970s. The second involves the development of Norway's competitive position and the
productive capacity of exposed sectors, particularly manufacturing industries. Judging
from past experience, the way in which oil revenue will be spent will have an important
bearing on the performance of traditional industries. The nature of the risks and the
problems involved may be partly illustrated by the last official medium-term survey published by the former government in 1 98 1 - which discussed three different scenarios
for the 1980s.
All three scenarios - which were drawn up before the recent large downward
revision of oil and gas revenue estimates - suggested that high employment conditions
could probably be maintained, with however a rather different overall economic
performance. The scenarios clearly showed the interdependence between international
and domestic developments. In addition to a weak international environment, the "Low"
growth scenario assumed a continuing deterioration in Norway's competitive position,
resulting in substantial loss of market shares for exposed industries, both on the
domestic market and abroad, poor operating results and low investment. The
"Intermediate" and the "High" growth scenarios, which were based on a better
international environment, assumed that the present competitive position could be
maintained. However, even on that assumption Norwegian industry was projected to
continue to lose market shares, albeit to a lesser degree than in recent years. Profits and
investment were also faring somewhat better. Particular features of the projections
included the very high investment requirements of the oil sector29. The projected growth
of private consumption was also relatively high in all three scenarios, largely as a result
of the assumptions made on the number of income recipients and the improvement of
living standards for pensioners. Indeed, for the active part of the population, only very
small increases in real disposable incomes were assumed in these scenarios. It should be
noted that the scenarios implied the continuation of trends observed in recent years, with
a widening of the public sector deficit (excluding oil revenues). Given the tendency for
import volumes30 to grow faster than export volumes, the development of the terms of
trade would be of crucial importance for the balance of payments. For the first half of
the 1980s the Long-Term Programme assumed a small terms-of-trade gain, mainly due
to the assumption of a continuing increase in real oil prices (1 Vi to 2 per cent annually)
underlying all three scenarios. On that basis, and taking into account a steady increase
in net transfers and interest payments to other countries, the current account was
projected to be roughly in balance by 1985.
However, the recent downward revisions of expected future oil export earnings and
tax receipts imply a distinct worsening of the medium-term outlook. Compared with the
initial scenarios, other things equal, the current account might thus post an appreciable
29.
Investment plans in the oil sector include the construction of "Statpipe", a new system of gas
pipelines connecting the "Statfjord" field to the Norwegian Mainland as well as the European Continent
through the existing pipeline from "Ekofisk" to Emden in Germany and the development of the "Heimdal"
field and one of the structures in block 34.10 (see Diagram 4).
30. The low growth of "traditional" imports in the period 1 98 1 -85 is due to an expected substitution of
domestic for imported oil.
29
Table 1 1 .
Alternative medium-term scenarios
Low
Intermediate
High
Low-
Intermediate
High
scenario
scenario
scenario
scenario
scenario
scenario
Average annual rates of growth
Private consumption
2.4
2.6
2.8
2.6
3.0
3.5
Public consumption
3.1
3.1
3.4
3.5
3.5
3.9
Gross fixed capital formation
4.1
5.0
5.0
0.5
2.6
3.6
Public
0.7
0.7
0.7
3.0
3.0
4.0
Shipping and oil drilling
1.1
10.7
10.7
-0.2
0.7
1.0
14.2
14.2
14.2
Dwellings
3.0
3.0
3.5
5.0
1.5
1.8
3.0]
0.3
Other business sectors
Total domestic demand
3.1
3.5
3.6
2.2
3.0
3.6
Exports of goods and services
1.3
3.2
3.8
0.9
1.8
2.7
0.6
3.3
4.5
3.9
5.0
5.2
2.1
Oil production
2 5 J
Stockholding
of which :
Traditional merchandise exports '
Imports of goods and services
1.9
3.3
of which :
Traditional merchandise imports '
1.3
1.8
GDP
1.9
2.6
3.0
1.7
2.5
3.4
GDP excluding oil and shipping
1.8
2.4
2.9
1.5
2.4
3.4
Terms of trade
1.5
1.2
1.3
-1.1
0.1
1.2
1.5
2.3
3.1
0.2
0.7
0.7
Current external balance, end of period (Per cent of GDP)2
[1Ï 1
[-1]
Memorandum items :
GDP growth, Norway's trading partners, weighted
Ratio between growth in Norwegian traditional exports and trading
partners' imports
Current external balance, end of period adjusted for change
in assumption on oil revenue (Per cent of GDP)3
j
to
-5
-3»
to
-4
-2i to -3
(-4i to -5)
(-3 5*10-4)
1.
Traditional trade excludes exports or oil and gas and trade in ships and platforms.
2.
3.
Numbers for the 1985-1990 period asumc lerms-of-lradc gains of the order or 1 per cent annually for the Low' and Intermediate scenarios and 5 per cent annually in the High scenario.
OECD estimates on the basis of a 20 per cent downward adjustment of oil export revenues as compared with the assumptions underlying the official scenarios.
(-2i to -3)
1
Note : Given the recent downward revision of oil revenues in the 1 982-85 period, these scenarios are not meant to represent a forecast. They should rather serve as an illustration of the nature of the problems
involved.
Sources : Planning Secretarial, Long-term Programme 1932-1985. April 1981 : OECD.
deficit in the medium term. With a similar proportional adjustment of exports for the
second half of the 1980s, the current deficit could remain important through most of the
decade. The external debt would therefore increase substantially in the 1 980s, whereas
in the Long-Term Programme the external debt was envisaged to disappear by the end
of the period.
Implications for economic policy
Although the foreign balance represents less of a constraint for Norway than for
most other Member countries, accepting an important current account deficit and a new
increase in foreign indebtedness would involve risks and would reduce the flexibility of
policy in the future. On the other hand, it is possible that the real price of oil will rise
again, but given the uncertainties attached to the size and timing of any such rise it
would not be advisable to base economic policy -on such an assumption. Indeed, the
possibility of a decrease in the real price of oil for some years to come cannot be ruled out
either. In any case, whatever the assumption adopted on oil revenue, due allowance must
be made for the uncertainties in the outlook.
Various lines of action might therefore be considered.
/)
/';")
Hi)
Output in currently operating fields is constrained by technical considera¬
tions, but exploration and development of new fields could be stepped up.
While improving the outlook in a longer-term perspective - the development
phase may last from 5 to 1 0 years - the immediate impact would of course be
a deterioration of the balance of payments due to heavy import require¬
ments. However, if the level of absorption were not increased, a temporary
rise in the current external deficit related to higher investment in profitable
projects would be acceptable.
Fiscal policy could be tightened with a view to strengthening the position of
the "traditional" sectors. This would imply a reduction of the degree of
absorption of oil revenues, less pressure on the labour market and more
moderate price and cost developments; imports may be reduced and exports
may rise. As argued in Part III, reduction of labour market rigidities and a
more efficient incomes policy could have an important role to play.
The present pattern of absorption could be altered, with a reduction of the
share of oil revenues "consumed" in the public sector and an increase in the
private sector's share.
Provided new fields would turn out to be profitable, the first line of action would increase
the safety margin in the longer run. But a broader strategy including a reduction and a
different pattern of oil revenue absorption would also be desirable in order to reduce
inflationary pressures, improve the competitive position and increase the rate of growth
of traditional exports. Indeed, it is now recognised that the adjustment of the Norwegian
economy to rising oil revenues has been too rapid and that there is virtually no safety
margin against unforeseen events. As a result the economy has become extremely
vulnerable.
It is important to realise that lower absorption, as well as changes in its pattern,
imply a reduction in the growth of public expenditure. Given the built-in mechanisms,
particularly affecting transfers and subsidies, expenditure cuts appear necessary just to
prevent the budget deficit- and hence the level of absorption- from rising.
Nevertheless, compared to some other Member countries with large budget deficits,
Norway is in a favourable position since the deficit may be seen as the counterpart of the
use of oil revenues domestically and, as such, does not have to be eliminated in the
medium run. Economic policy should, however, minimise its negative implications for
competitiveness and efficiency. The new Government's intentions to cut direct taxes
31
would seem to favour this approach but the financing of the tax cuts may raise difficult
problems. It will clearly not be an easy task to reduce the growth of public expenditure,
since not only public consumption but also transfers and subsidies may have to be
curtailed. A delicate balance will have to be struck between social generosity and
economic efficiency. In particular, the justification for built-in adjustments of many
expenditure components may have to be reconsidered. Introduction of an income test for
the allocation of transfers and subsidies could be envisaged, and many public services
which so far have been provided without charges could be sold at a price. Some of these
measures (cuts in subsidies; charges on public services) would necessarily put pressure
on prices in the short run but they should be accompanied by measures to improve the
functioning of the economy and, thus, the possibilities of reducing inflation in the
medium term.
III.
INCOME FORMATION AND ECONOMIC POLICY
In view of the need to improve the competitiveness of traditional industries, the
following paragraphs will try to assess the extent to which, in addition to an appropriate
stance of overall policy and a different pattern of resource allocation, more favourable
cost developments could be achieved through measures designed to influence income
formation. After briefly reviewing the institutional setting, the scope for achieving more
moderate nominal wage increases will be discussed in the light of existing labour market
conditions, prevailing rigidities in the income determination process and recent
experience with price controls and incomes policy.
The institutional setting
Similar to other Scandinavian economies, the Norwegian system of wage
formation can be described as centralised collective bargaining, at the national or
industry level31. The degree of centralisation has increased over time as the authorities
have encouraged the concentration of all important wage settlements in the spring
period, with a view to avoiding leap-frogging and ensuring the achievement of
macro-economic goals. The income settlements for agriculture (and the adjustment of
pensions) have also been linked to the wage settlements32. The Federation of Trade
Unions - the LO - organises some 45 per cent of wage and salary earners. The
employers' side is dominated by the Employers' Confederation (NAF) in the private
sector, and the central government and the municipalities in the public sector. Even if
the LO organises a somewhat smaller share of labour than in Denmark or Sweden, the
LO/NAF agreements have traditionally acted as wageleader for other settlements and
for the non-unionised part of the labour market. Settlements are typically biennial, with
a renegotiation clause for the second year. Formal price indexation clauses have been
extensively used, albeit to a lesser extent after 1975. Throughout the post-war period,
the LO has pursued a strongly egalitarian or solidaristic wage policy during the central
negotiations. As from 1980, efforts to raise the relative wage level of certain industries
have taken the form of a "minimum wage guarantee", whereby in no sector the average
31.
A decentralised wage round - at the industry level - last took place in 1974, and, as indicated in
Part 1, may again take place this year.
32. The institutional setting for incomes policy is discussed below.
32
Diagram 8.
24
Wages and unemployment
-
24
HOURLY WAGE
22
IN
INDUSTRY
22
CONTRACTUAL
WAGEDRIFT
20
18
COSTS
E3
20
NON-WAGE
LABOUR
COSTS
18
18
16
14
14
12
12
10
10
8
8
6 "::
6
4
4
2
2
0
0
-2 L.
J
L
J
L
J
-2
-i
2.6
-| 2.4
2.2
2.0
1.8
1.6
J
68
69
70
71
72
73
74
75
76
77
78
79
8
1.4
1981
Sources: Norwegian Employers' Confederation; OECD, Labour Force Statistics.
wage level is to be lower than 85 per cent of the average for total industry33. Despite the
overall centralised framework, local negotiations have always been an important
determinant of overall wage developments, and increasingly so in the 1 970s. In the most
recent agreement local negotiations are supposed to take place only once a year, and an
upper limit has been put on the size of local pay rises.
The functioning of labour markets
In most OECD countries, slow growth of activity since the end of the 1 970s has
been accompanied by persistently high inflation and rising unemployment, together
with increasing labour market rigidities. By contrast, in Norway economic growth has
33.
The cost of this scheme is covered partly by the employers in these particular sectors, partly by all
workers via a "low wage fund".
33
Diagram 9.
Labour market tightness indicator
Note: Reported vacancies relative to number of job seekers registered with the Public Employment
Agencies.
Source; Directorate of Labour.
Diagram 10. Excess supply of labour
Difference between unemployment and vacancy rate
PER CENT OF
LABOUR
FORCE
PER
CENT
OF
LABOUR
FORCE
2.0
2.0
1965
66
67
68
69
70
71
72
73
Source: OECD, Main Economic Indicators.
34
74
75
76
77
78
79
1980
been relatively well maintained and unemployment has remained low, while the
inflation performance has not been significantly out of line with that of the average
OECD country. Nevertheless, increasing concern has been voiced recently about the
detrimental impact of growing labour market rigidities and the scope for maintaining
full employment conditions in the future without generating unacceptable rates of
inflation.
I
In spite of significant demographic changes in the composition of the labour force34
and of a rising tendency for job seekers to register as unemployed35 the overall
unemployment rate has remained very low in recent years and only marginally higher
than in the 1960s36 (hovering in the 1 to 2 per cent range). It is true, however, that the
number of people engaged on various employment support schemes has tended to
increase somewhat, which could be an indication of greater slack in the labour market37.
The increased importance of such schemes, however, would seem to reflect rising
structural unemployment due to skill and geographical mismatches rather than greater
Diagram 11.
Number of persons affected by reduced economic activity
Per cent of labour force
7.
%
2.2
--1
2-2
I
0.2
J
1965
66
67
68
69
70
71
72
73
74
75
76
77
78
79
1980
Source: Directorate of Labour.
34.
The share of women in the labour force rose from some 30 per cent in the late 1960sto41 percentin
1980. As women are traditionally experiencing higher unemployment rates, this should in isolation have
contributed to raise the overall level of unemployment. On the other hand, the share of youths ( 1 5-24 years) in
the labour force, a group which traditionally records far above average unemployment rates, was reduced
somewhat in this period.
35.
36.
This tendency has been actively supported by the labour market authorities.
Two unemployment concepts are available: The number of unemployed registered with the
Employment Agencies, and the "number of job-seekers without income" recorded in the quarterly labour
force surveys. The latter tends to be somewhat higher, but the difference has become smaller through the
1970s.
37. Fully comparable historical series are not available for the period prior to 1 977, but the number of
persons engaged on those schemes would appear to have amounted to 0.6-0.7 per cent of the labour force in the
1975-78 period compared with 0.8-0.9 per cent in the 1979-81 period.
35
cyclical slack. In this context it may also be argued that those covered by labour market
schemes are unlikely to exert a moderating influence on unions' bargaining behaviour
and that in such circumstances the rate of "open" unemployment remains the proper
indicator for assessing the influence of labour market conditions on wage behaviour.
A comprehensive analysis of medium term labour market trends is made difficult
by various statistical pitfalls. Thus, the increased tendency for job seekers to register
with the Employment Agencies seems to have coincided with an opposite tendency for
the reporting of vacancies38. Statistically, this is reflected in a decline since the
mid-1960s in the ratio between vacancies and job-seekers registered with the Public
Employment Agencies39. Thus, a given rate of unemployment is now associated with a
lower rate of unfilled vacancies than was the case 10 or 15 years ago. Similarly, the
greater proportion of the labour force now affected by reduced economic activity
(temporary or permanent lay-offs, reduced working hours) is influenced by the stronger
V legal obligation for employers to report such lay-offs. Consequently, the easing of labour
market conditions is probably much less important than suggested by these labour
market tightness indicators.
On the other hand, available labour market data would seem to suggest a growing
tendency towards rigidities and segmentation. There has been a significant increase
since the late 1960s, in both the average duration of unfilled vacancies and the average
period job seekers spend in search of new employment. Overall, this could indicate some
greater skill and/or geographical mismatches, even if longer search periods may also
reflect more generous unemployment benefits or a more liberal interpretation of
eligibility rules40. The geographical dispersion41 of unemployment rates has shown no
clear tendency to increase over time but geographical mobility has declined somewhat
since the early 1970s42, probably influenced by the marked increase in local public
sector employment opportunities and by the selective industrial support schemes. The
increasing number of families with two breadwinners (from some 25 per cent of the
labour force in the early 1970s to nearly 45 per cent in 1981) may have had a similar
effect. Skill mismatches may have become more important as suggested by the
somewhat greater dispersion of job-seekers/vacancy ratios for different occupational
groups43. Furthermore, according to surveys undertaken by the Labour Directorate,
between one-fourth and one-third of manufacturing enterprises report permanent
difficulties in filling vacancies, notably for skilled labour.
In summary, although the evidence is not entirely unequivocal, mismatches on the
labour market would seem to have increased over the last 1 0 to 1 5 years, while the
: unemployment rate has remained virtually stable. To the extent that supply of labour is
' now reacting more slowly or less completely to structural changes in demand, this has
; inflationary implications. Increased segmentation of labour markets, whereby segments
38.
A large part of vacancies would now seem to be filled outside the Public Employment Agencies,
despite the authorities' efforts to induce employers to report vacancies.
39. Whereas in the late 1 960s some 9 out of 1 0 registered job-seekers were unemployed, only some 2 out
of 3 are unemployed today.
40. As a crude indication it may be noted that in the late 1970s some 10 per cent of requests for
unemployment benefits were turned down, compared with some 1 5 per cent in the late 1 960s.
41. Measured by the coefficient of variation. Unemployment rates range from 2VS-3 per cent in the
northern regions to below Vi per cent in the Oslo region. However, lack of data for the 1 960s makes it difficult
to draw firm conclusions.
42.
Admittedly, geographical mobility is also influenced by factors not directly related to the labour
market, such as the level of education, etc. According to a 1 972 survey, only 35 per cent migrated mainly for
professional reasons.
43. It should be noted that main occupational groups for the total economy may be a too aggregated
level of analysis. However, a similar analysis has been made for manufacturing (17 subsections) with similar
results.
36
Diagram 12.
Functioning of labour markets
WEEKS
WEEKS
2.3
8
2.2
*<
AVERAGE DURATION OF UNFILLED VACANCIES
/\
2.1
/
(LEFT SCALE)
*
\
AVERAGE JOB SEARCH PERIOD
/
(RIGHT SCALE)
2.0
^
7
J
'
/
1.9
6
/
/
1.8
A
5
1.7
A
1.6
/
4
1.5
1.4
3
i
i
1.3
|_
,
COEFFICIENT OF
i
i
i
i
i
i
VARIATION
i
i
COEFFICIENT
i
OF
VARIATION
1.2
1.1
.
GEOGRAPHICAL
DISPERSION
-
OF UNEMPLOYMENT RATES1
1.0
1.1
1.0
*
'
0.9
*»
*
/
/
^^
\
0.9
0.8
0.8
0.7
0.7
\
0.6
0.5
1
DISPERSION
»
0.4
OF
OCCUPATIGNAL
«-"
VACANCY/JOB-SEEKER2 RATIOS
/
y
\
<--~-\f
0.6
\
0.5
/
1
1
0.3 L
0.4
1
1
1
1
1
1
i
i
i
i
_
1970
71
73
75
80
0.3
1981
1 . Dispersion of unemployment rates in different counties, as measured by the coefficient of variation
(ratio of the standard deviation to the sample mean).
2.
As measured by the coefficient of variation. Main occupational groups, total economy.
Source: OECD.
with lack of labour may co-exist on a more permanent basis with segments characterised
by excess supply, implies stronger wage pressures at a given unemployment rate than
earlier.
Rigidities in income determination
The influence of labour market conditions on wage developments has been
confirmed by several empirical studies, the impact being felt more on wagedrift than on
centrally negotiated wage increases. For the latter, the development in real disposable
income seems to play a prominent role. Formal index clauses in wage settlements were
used throughout the 1960s and the first half of the 1970s. Thereafter, renegotiation
clauses referring only indirectly to price developments have been used within the
framework of incomes policy arrangements aimed at weakening price-wage links. Since
price expectations are still an important factor in wage bargaining the 1 98 1 settlement
again incorporated an explicit index-clause (which was later suspended, see Part I).
37
The solidaristic wage policy traditionally pursued by the LO with a view to
promoting social equity has introduced important elements of rigidity in wage
formation. It may be argued that persistent attempts to narrow wage differentials due to
differences in productivity growth or other market forces are counterproductive, and
result in an increase in the average wage level out of line with the overall productivity
performance. Available data indicate that in spite of the egalitarian profile of central
agreements, wage dispersion in industry has tended to increase over time, as in most
other OECD countries44. Although it is not possible to know what would have happened
otherwise, there can be little doubt that this policy does put upward pressure on the
overall wage level; reduced wage dispersion emanating from the national settlements
leads to a catch-up effect through higher wagedrift, as the wage leading sectors strive to
re-establish previous differentials. Empirical evidence would seem to confirm a positive
link between the egalitarian wage policy and wagedrift, but the quantitative importance
of such effects is difficult to measure with accuracy.
Much concern has been voiced recently about the impact of the rapid rise in wages
and salaries in the oil sector on the overall wage level and competitiveness. Wage
pressures in non-oil industries may result partly from "demonstration" effects, and
partly because the oil sector is competing directly with more traditional sectors for
certain groups of experts or skilled labour (e.g. plumbers and electricians). The higher
wage level in the off-shore sector (60 to 1 00 per cent above that of similar types of work
on the mainland) partly reflects differences in working conditions. At the same time, it is
also true that the oil companies are willing to accept markedly higher wage increases due to the high rates at which their profits are taxed and since production stoppages as a
result of strikes are extremely costly.
The question of rigidities and of the various links in income formation must also be
seen in a wider context than that of relative wages in industry. Thus, in 1 975 Parliament
decided to raise living standards of farmers to a level comparable with that of industrial
workers. This implied a rise of some 50 per cent in farmers' real disposable income over
the following two years. Furthermore, living standards of pensioners, and more
Table 12.
United States
Japan2
Wage dispersion in industry1
18.7
-
17.3
20.6
21.6
22.6
23.4
23.9
24.6
24.5
25.9
25.7
26.1
25.7
12.9
Germany
11.0
12.8
13.3
13.1
13.2
13.4
France
15.9
16.5
14.1
13.9
13.5
13.1
13.2
United Kingdom
14.5
15.7
13.8
14.7
14.2
13.0
14.5
Italy
20.4
22.5
17.8
17.2
14.1
12.0
-
Canada
20.8
20.6
19.9
19.1
19.2
19.4
19.5
Austria
12.0
15.2
16.1
17.4
17.6
18.2
18.9
Belgium
13.5
14.6
16.9
15.3
15.0
18.2
18.9
Denmark
11.6
11.6
13.0
14.4
14.6
13.6
13.9
Finland
13.1
13.8
13.8
13.6
14.0
14.4
14.6
Netherlands
11.3
13.5
12.8
11.8
11.7
11.8
11.1
Norway
10.1
10.8
11.7
11.6
11.5
12.5
13.3
9.4
8.7
9.2
9.2
9.3
8.8
8.7
Sweden
1.
Measured as the coefficient of variation ; i.e. the standard deviation of sectoral wage rates around overall mean, expressed in per
cent of overall mean.
2.
Calculations based on total labour costs.
Source : Swedish Employers' Confederation.
44.
Female-male wage differentials have nevertheless been substantially reduced.
38
Table 13.
Real disposable income developments for different income groups
Average annual per cent change
Industrial worker, married, two children, earning
80 000 Kr. in 1980
Salary earner in industry, married, two children,
earning 125 000 Kr. in 1980
1.8
0.4
5.0
-0.1
-0.3
0.2
-1.6
3.1
-2.3
2.5
3.4
-0.6
2.5
4.7
3.6
0.8
Public employee (low level), married, two children,
earning 77 000 Kr. in 1980
Pensioner, couple, minimum pension
3.7
3.4
Nominal hourly earnings in manufacturing
11.4
10.5
16.1
6.6
10.5
Nominal income per man-year in agriculture
15.9
15.5
25.1
9.4
2.8
Memorandum items :
Sources : Del Tekniske Beregningsutvalg for Inntektsoppglbrene, Rapport No. 2 1981; Ministry of Finance.
generally of transfer recipients, have recorded a steep increase relative to that of the
active population45. Whatever their justification on social grounds, large-scale measures
aimed at redistribution of income may have had detrimental macro-economic effects.
Apart from their budgetary costs, they have probably - through their effects on
incentives to work and mobility - increased the rigidities in the labour market. They also
seem to have made the income determination process more inflation prone.
As in most other OECD economies, wages have increased markedly less than total
wage costs since the early 1 970s. Non-wage labour costs in industry have risen from
some 35 per cent of the wage bill in 1970 to some 48 per cent in the three years to 1981.
Social security contributions as well as pay for time not worked have risen significantly
throughout the 1970s. Following the introduction as from mid- 1978 of a more liberal
Table 14.
Non-wage labour costs in industry
Per cent of hourly earnings
1970
1972
1974
1976
1978
1980
1981 '
14.2
14.7
15.6
14.4
18.1
20.5
20.2
Legal holidays paid by employer
3.5
3.9
4.3
3.0
3.9
3.9
3.4
Vacation payment (4 weeks)
9.8
9.9
9.9
9.9
10.0
10.0
10.2
Payment due to sickness2
0.9
0.9
1.4
2.5
4.2
6.6
6.6
15.6
19.6
22.2
20.8
20.2
20.8
21.2
5.7
5.7
5.4
5.4
6.7
6.7
6.7
35.5
40.0
43.2
40.6
45.0
48.0
48.1
Payment for days not worked
of which :
Social security contributions
Other expenditure of social character
Total
1.
2.
Preliminary estimates.
As from 1st July, 1978. a new sickness benefit system was introduced. Prior to 1978, some of the costs related to sickness are regis¬
tered as a contribution to social security.
Source : Norwegian Employers' Confederation.
45.
In the 1 970/8 1 period, the real value of minimum pensions rose at a rate double that of an industrial
worker.
39
system for sickness benefits this cost component rose abruptly, as short-term
absenteeism46 due to sickness increased. To the extent that a rise in non-wage labour
costs is compensated by lower nominal wage increases, total wage costs are not affected.
However, there is no evidence that such full offsetting has actually taken place; it is
likely that the rise in non-wage costs has added significantly to overall cost
pressures.
The experience with price controls and incomes policy
Direct price controls have been frequently used in Norway. Since 1 969. there have
been more than 10 periods with some form of direct controls on prices or mark-ups. The
reliance on this instrument has been particularly marked since 1978; first during the
18-month price freeze to the end of 1979, and more recently from August to December
1981. Last year's Survey on Norway argued that the short-run positive effects of the
price freeze were being rapidly offset by a re-acceleration of inflation during the
"re-entry" period reflecting, inter alia, pent-up demands from the freeze period and
strong labour market pressures. Developments over the last 1 2 months would seem to
have confirmed this view. It is obviously very difficult to assess precisely what would
have happened without the freeze, but it may be noted that in early 1981 the price level
was already back on its previous trend. The second price freeze introduced in the autumn
of 1 98 1 also confirms that the re-entry process after the earlier freeze was difficult. A
recent empirical analysis47 lends further support to the view that the 1978-79 price and
wage freeze gave only short-term relief from underlying inflationary pressure. By the
first half of 1981, the actual consumer price level was thus some 3 percentage points
above that implied by historical relationships48. Some of the catch-up was due to the rise
in publicly-administered prices and the rise in net indirect taxes in January 1981. But in
the first quarter of 1 98 1 the level of the market determined components of the consumer
price index was also higher than predicted by historical relationships.
Norway has also had a long experience with incomes policy. The centralised
collective bargaining system constituted a favourable setting for this kind of policy. At
the same time, incomes policy may have served to accentuate the centralised nature of
wage and income determination. Although the choice of instruments has changed
somewhat over time, the basic underlying approach has remained the same: i.e. to use
the tax system (subsidies or direct taxes) in order to achieve lower nominal wage and
price developments than under the free play of market forces. A high degree of social
consensus provides an essential basis for this approach. The necessary incomes policy
institutions have been built up gradually. In the Contract Group49, the Prime Minister
and the ministers in charge of fiscal affairs, consumers, agriculture and fisheries meet
with representatives of the most important interest groups for an exchange of views and
information related to the settlements. The Technical Expert Group50 is charged with
supplying the social partners with the technical background on income developments,
prices, etc. The public Mediator and the Arbitration Board are also well established
institutions. In 1964, 1966, 1978 and 1981 the main settlements were ruled by the
Arbitration Board.
46. Under the new provisions, absence of less than three days can be taken without presentation of a
medical certificate. For male workers in industry sickness absenteeism rose from 1 per cent of total working
days in the first half of 1978 to 1.5 per cent in the first half of 1981.
47.
A.J. Isachsen and K.N. Kjaer, "Prisstopp mot Infiasjon?", Working Paper, Norges Bank,
December 1981 (unpublished).
48.
The explanatory factors used in the study were, among others, wage costs and money supply growth
in excess of real output growth.
49. Kontaktutvalget, created in 1962.
50.
Set up in 1967 on a temporary basis, and made more permanent as from 1969.
40
Historically, two phases of incomes policy may be distinguished. From the early
1960s until 1973, various types of price subsidies was used to influence the outcome of
the central wage negotiations and the triggering of index clauses. Towards the end of
this period, a broader range of subsidies was used, combined with increased children's
allowances and regulation of prices and mark-ups. To an increasing extent, income
settlements for agriculture were also linked to the wage rounds. The budgetary costs of
government involvement were not very large, and took place in an overall context of a
fairly well balanced fiscal and monetary policy. Furthermore, the system of wageformation was functioning broadly in line with the Scandinavian text-book model, with
the room for wage increases determined by international price developments and
productivity growth in the exposed sectors of the domestic economy51 . As from 1 973 the
conditions for such an approach changed drastically:
-
-
Large external price shocks inevitably fuelled domestic inflation through the
wage system and price expectations.
Income expectations were raised significantly as the oil sector started
expanding.
-
Fiscal policy became too expansionary in an effort to offset deflationary
-
external impulses.
In these circumstances, the wage-leading role of exposed sectors was progres¬
sively undermined.
Thus, while the need for an effective incomes policy increased, the possibility of its
success was greatly reduced. The authorities chose to rely heavily on cuts in direct taxes
to influence the result of the wage rounds. Compared with the first period of active
incomes policy, the budgetary costs increased markedly. The measures needed to
implement the ambitious income goals for farmers (see above) came on top of this. All in
all, incomes policy measures added significantly to an already expansionary fiscal
policy. Some moderation in nominal wage increases granted during the central wage
settlements was probably obtained. But by putting additional pressure on labour and
product markets, this kind of incomes policy did undoubtedly add to wagedrift. It may
be argued that the net effect on wages was at best neutral in the short run, while
contributing to the marked weakening of the budget position throughout this period (see
Part II).
Some policy considerations
Analyses carried out in the preceding paragraphs point to the increasing difficulties
involved in pursuing ambitious policy goals with regard to both employment and
inflation. At a given rate of unemployment, wage pressures would now seem to be
stronger than earlier, mainly due to greater segmentation of labour markets, with excess
supply in some segments co-existing with lack of labour in others. There is also
considerable inertia in the inflation process, due to wage-price links and to important
elements of wage-wage rigidities. While direct controls of prices and wages in certain
circumstances may help to break an inflationary spiral, the recent Norwegian
experience suggests that in conditions of strong demand pressures, such measures are
unlikely to provide more than temporary relief. At the same time, the scope for
traditional incomes policy has become more limited due to the need for fiscal restraint.
Under prevailing labour market conditions, the social partners' ability to ensure a
moderation of nominal wage developments in return for tax concessions may also be
questioned.
51.
For a detailed description of the "Scandinavian" model, see the June 1981 Survey of Sweden.
41
As stressed in previous Surveys a less expansionary fiscal policy may help ease
inflationary pressures. Some increase in the rate of unemployment may result, but the
rise should not be large if the desirability of increased geographical and professional
mobility is accepted and if labour market policies are adjusted accordingly. Since the
personal income distribution is more equitable in Norway than in most other OECD
countries, a slowdown in redistributional efforts through wage policy may also
contribute to lower wagedrift. In any case, the tax and transfer system is probably better
suited for achieving distributional goals. A further significant reduction of selective
industrial support schemes that would permit structural change to take place, would
help to reduce labour market segmentation. This may put a somewhat greater burden on
regional policies. But it should be emphasized that unless geographical mobility
increases, the rate of unemployment for any given rate of demand pressure will be
higher. The problem of wagedrift is a particular challenge. Part of it reflects
productivity increases and, as such, may play a useful role in attracting labour to the
most productive parts of industry. It is doubtful, however, that undesired spillover
effects can be permanently reduced through direct interference - in the form of a
"ceiling" or other measures - if institutional arrangements such as the minimum wage
guarantee pull in the opposite direction. Specific measures aimed at preventing
excessive local wage increases may be worth considering, notably in the case of the oil
sector where the need for government interference is particularly strong.
IV.
CONCLUSIONS
In relation to most other Member countries, Norway has continued to enjoy over
the last few years a favourable economic situation. In spite of the weak international
environment, which has adversely affected demand for traditional exports, real incomes
have been rising at a fairly rapid rate, at least until recently. Unemployment has not
exceeded 2 per cent of the labour force, reflecting the high priority accorded to
maintaining full employment. The current external balance has improved markedly,
shifting into a significant surplus. This performance has of course been greatly
facilitated by rising North Sea oil and gas revenue. Despite strong pressures on the
labour market and high income expectations, inflation has not, up to 1980, been higher
than the OECD average.
Nevertheless, it is not difficult to see that performance could have been even
better:
a)
It is striking that industrial production at present is lower than in 1 973; over
the same period industrial output in the OECD area as a whole rose by
around 10 per cent. While the rapid growth of the oil sector was bound to
squeeze out certain traditional industries, two features of policy may have
played a role in the poor industrial performance. Defensive government
support to enterprises in difficulties has counteracted structural change and
reduced productivity growth by maintaining employment in weak enter¬
prises at the same time as there was a significant shortage of skilled labour in
more dynamic sectors. Secondly, egalitarian wage policies together with a
tax and transfer system characterised by very high marginal tax rates and
generous social benefits have reduced incentives to work and to move; the
importance of this factor is difficult to estimate, but it would be unwise to
exclude the possibility that it could have a significant adverse influence on
productivity.
42
b)
Given the existence of a high degree of social consensus and the extent to
which incomes policy procedures and instruments have been developed,
better control of inflation could have been achieved in recent years.
Thus, as stated in previous Economic Surveys, there were good reasons for modifying
certain aspects of economic and social policies; and these reasons have been reinforced
by the poor inflation performance in 1 98 1 and the important changes in the prospects for
future oil revenues. Furthermore, as noted in Part 1, unless wage increases could be
limited to some 5-6 per cent, the competitive position is expected to deteriorate
significantly in 1 982 - a development which would entail further losses of export market
shares and delay the recovery of production in manufacturing industries.
As noted earlier, despite the weak trend in productivity, real incomes and living
standards have risen at a fairly good rate until recently, reflecting the growth of the oil
sector, particularly the sharp rise in oil prices. But given the adaptation of the economy
to high levels of oil revenues, it has now become more vulnerable to developments in the
oil sector. Estimated output on existing oil fields has been revised downwards several
times; accelerated development of new fields can of course be considered, but would not
lead to much higher output before the 1 990s. Moreover, the outlook for oil prices is
clearly more uncertain than envisaged earlier. The real oil price may well turn up again
at some stage following its fall over the last year or two, but the timing and size of any
such rise is obviously impossible to forecast. A further fall in real oil prices over the next
few years cannot be excluded either. It would therefore be prudent to make sure that
future increases in real incomes are based more on the expansion of non-oil sectors and
exports of traditional goods than during the 1 970s. Given the risk of a widening budget
deficit, high interest rates and inflationary pressures in general, such a reallocation of
resources would be difficult to achieve unless past policies are changed.
A major point for consideration is the possible conflict between certain aspects of
present policies and the desirability of stronger productivity growth. First, it has been
the intention of the authorities for some time to reduce support to ailing industries and
some progress has been made. But more determined efforts in this direction would help
both to increase efficiency and reduce inflationary pressures. Secondly, it would be
desirable to supplement a more positive industrial policy by measures to encourage and
facilitate the movement of labour to the dynamic sectors of the economy, taking
advantage of the fact that labour market policies are already very developed in Norway;
these measures could, inter alia, include stricter application of the unemployment
insurance system so as to increase the mobility of job seekers.
Thirdly, to increase economic efficiency, a general reconsideration of the tax and
transfer system would seem desirable. This will necessarily take time. In the meantime
certain fairly obvious distortions in the system could be corrected. A reduction of high
marginal tax rates would be desirable, but is may be argued that the scope for steps in
this direction is limited at present by the decline in government revenue due to the less
favourable oil situation. However, the scope for lowering marginal tax rates could be
increased by measures which would be desirable in their own right:
a)
b)
Without reducing the essential features of a well developed social system,
there are reasons for considering whether certain benefits are unduly
generous, with effects on working habits, mobility and absenteeism. The less
favourable economic situation is an additional reason for reconsidering the
transfer system which to a large extent was decided on quite different
assumptions about the economic outlook.
One reason why present high tax rates have been accepted may be the fact
that interest payments can be deducted from taxable income. However, the
fact that deductibility of interest payments makes high tax rates acceptable
to individual taxpayers does not make them more acceptable to society as a
43
whole. The adverse effects of high tax rates are not reduced by the
deductibility of interest payments; the latter probably entails additional
distortions (e.g. with regard to resource allocation). If this is correct, the
society as a whole would stand to gain both from the reduction of tax
deductibility of interest payments and from the reduction of tax rates. More
generally, in the field of taxation, the present property tax system is another
area which may be looked into in order to reduce distortions and enlarge the
tax base.
The present Survey has also discussed measures which could be taken to achieve a
moderation of nominal wage increases and to improve competitiveness. Part III points to
the desirability of reducing rigidities in the wage determination process through,
inter-alia, somewhat less emphasis on egalitarian wage policies and measures to avoid
spillover effects from the oil sector. Slightly easier labour market conditions would
probably reduce wagedrift and hence facilitate the operation of incomes policy. To the
extent that mobility could be increased and professional mismatches reduced by
vocational training programmes, other labour market measures, and stronger incentives
to move (as discussed earlier) the rise in unemployment would probably be very small.
The labour market implications of the planned large investments in the oil sector will
also have to be taken into account, given the significant shortages of skilled labour which
exist in some sectors.
A more cautious stance of fiscal policy would also facilitate monetary manage¬
ment. Last year's Survey stressed the growing burden put on monetary policy by the
expansionary impact of budgetary transactions. Despite significant increases in nominal
interest rates in recent years and reduction in credit from the State banks,
implementation of a tight credit policy to counteract an expansionary fiscal policy has
been difficult. Thus, over the last two years the credit budget targets regarding private
bank lending and bonds were overshot. Given the present stance of fiscal policy and the
high demand for consumer credit, problems connected with monetary management are
likely to persist. Continued reliance on regulations and selective controls will be difficult
to avoid in 1982. Past experience suggests, however, that this may not guarantee the
achievement of monetary goals. Furthermore, as stressed in earlier OECD surveys the
use of such instruments over an extended period of time implies the risk of misallocation
of resources. Letting interest rates rise to market clearing levels does not constitute an
alternative since it would seriously hamper business investment and increase cost
pressure. Moreover, large parts of the Norwegian credit market - notably bonds to
finance shipbuilding, dwellings and local government borrowing as well as other State
bank lending may not be very sensitive to changes in the overall level of interest. Over
the medium term, it would therefore be desirable to aim at a more market oriented
system, while reducing demand for credit. Changing the present stance of fiscal policy,
reducing the deductibility of interest payments and better control of inflation, are
probably important pre-conditions for such a change in monetary policy.
The present Survey has, again, noted important favourable aspects in the
Norwegian economy, notably the continuing high level of employment. It has also
discussed certain less favourable features, particularly the slow growth of productivity
and the extent to which this has been influenced by policies which have delayed
structural adjustment and reduced labour mobility and work incentives. The need to
reconsider these policies has existed for some time, but has been enhanced by the
changed prospects for future oil revenues and the likelihood that future growth of real
incomes will have to rely more on the expansion of the non-oil sectors than during the
1970s. The main conclusion may be that there is a certain conflict between
redistributional goals and efficiency and that economic performance could be improved
if somewhat less emphasis than in the past were put on the former and somewhat more
on the latter.
44
ANNEXES
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Annex
CHRONOLOGY OF MAJOR ECONOMIC POLICY EVENTS
1980
January
The price and income freeze, which had been introduced in September 1978, was terminated as from
1st January, but strict price controls were maintained.
Negotiations between the Federation of Trade Unions (LO) and the Employers' Confederation (NAF)
concerning the new wage agreement were initiated.
Primary reserve requirement increased from 3 to 1 0 per cent for savings banks in Southern Norway and
from 3 to 6 per cent for commercial banks in the same regions.
February
Presentation of a Government report to Parliament on energy policy, drawing up guidelines for electricity
prices and the further development of energy supply.
A similar report covering the oil activity on the continental shelf was issued, discussing various aspects of
the future extraction of oil and gas.
March
The Government proposed amendments to the Petroleum Taxation Act, including:
i)
A reduction of the tax credit period from an average of 1 2 months to 6 months, with a transitional
period of 2V4 years.
iï)
The special tax on incomes in the petroleum sector was raised from 25 to 35 per cent, and the
taxbase was widened.
The Central Bank's automatic borrowing facility for private banks, which had been suspended since
November 1979, was reintroduced with a borrowing potential of 50 per cent of the previous potential.
The Central Bank sold money market papers to the banks for Kr. 1 70 million at an interest rate of 1 2'A per
cent.
April
A two-year wage agreement was recommended by the two major labour market organisations. The main
elements were:
/)
iï)
A general pay increase of 5.2 per cent as of 1st April 1980.
Establishment of a minimum-wage guarantee scheme, by which the average wage in any single
firm shall not be below 85 per cent of average wages in industry.
i'ii)
Average wagedrift shall not exceed 3 per cent in the course of 1 980. If this limit is exceeded a
wagedrift ceiling shall be introduced for the second year of the agreement.
j'v)
Wage adjustments for the second year of the agreement shall be negotiated prior to the expiration
of the first year.
May
The Revised National Budget for 1980 was presented to Parliament.
To facilitate the unions' acceptance of the proposed wage agreement, the Government presented
measures amounting to Kr. 1.4. billion:
i)
ii)
i/7)
A reduction of the income tax in 1980 by 1 percentage point from 1st July.
Increased children's allowances with effect from 1st May.
Increased tax deductibility for trade-union membership fees.
47
The target for private banks' lending for 1980 increased from Kr. 6 100 million to Kr. 7 050 million.
The Government's borrowing programme abroad was terminated.
The Central Bank's automatic borrowing facility for private banks fully reintroduced.
Primary reserve requirements for savings banks and commercial banks in Southern Norway reduced to
8 per cent and 5 per cent respectively.
Enterprises allowed to increase prices as from 1 st May to cover the wage increases implied by the central
wage settlement between the two major labour market organisations. The tight general price regulations were
maintained.
July
The Central Bank sold money market papers to the banks on two occasions for a total of Kr.3.6 billion at
an interest rate of 1 1 Vi per cent.
August
Primary reserve requirements for savings banks and commercial banks in Southern Norway increased to
10 per cent and 13 per cent respectively. The banks' borrowing facility with the Central Bank reduced by
85 per cent.
The loan commitment quotas for State housing banks were increased by Kr. 525 million.
October
The Government presented the National Budget for 1981, including the following policy changes:
i)
ii)
A more flexible interest rate policy.
The regulation of bond issues, which had been used to limit the demand for bound credit, was
terminated and the access to the domestic bond market liberalised.
The purpose of these measures was to facilitate monetary management and improve resource allocation.
Lending rates for private banks will be based on guidelines issued by the Ministry of Finance, with the aim of
placing somewhat greater emphasis on supply and demand conditions in the credit market. Short-term rates
were allowed to increase by lk per cent, to 14 per cent on average, and long-term interest rates could increase
by 1 per cent, to an average of 1 2 per cent. Interest rates on loans from State banks were increased by 1 per
cent.
Hi)
The target for private bank lending was set at Kr. 10 billion in 1981 as compared with
iv)
Changes in the tax and excise rates system, consisting of:
Kr.7.05 billion in 1980.
-
reductions in income taxes and higher family allowances
-
increased net indirect taxes.
The direct price effects of increased excise taxes, reduced consumer subsidies and VAT compensation for food
is estimated at about 2'A per cent. The net effect of the detailed tax proposals is a weakening of the central
government and social security budget for 1981 by some Kr. 1.2 billion.
November
The bond investment obligation for private banks in Southern Norway was reduced from 60 to 30 per
cent.
The Central Bank sold money market papers to the banks for an amount of Kr.122 million at an interest
rate of 1 1 Vz per cent.
December
The final central government and social security budget presented to the Parliament. The deficit before
loan transactions (excluding oil taxes) estimated at Kr. 17.9 billion and Kr. 18.6 billion in 1980 and 1981
respectively. Including oil taxes a surplus of Kr. 10.4 billion is expected in 1981.
Presentation of a parliamentary bill proposing cuts in the taxation of companies. The measures will be
effective as from 1981 and with further cuts foreseen in 1982.
Presentation of a Government white paper to Parliament on industrial policy. Main goals were to reduce
selective support measures and strengthen the manufacturing industry.
1981
January
The extraordinary price control measures, effective since September 1978, were abolished.
48
Interest rates on government bonds raised by 1 percentage point, to 1 0!A per cent for 5-year bonds and to
11 per cent for 10-year bonds.
February
Interest rate on Treasury Bills increased by 1 percentage point, to 9.5 per cent. The private banks'
automatic borrowing facilities in the Central Bank were fully reintroduced as from 1st March, 1981.
March
Primary reserve requirements for commercial banks in Southern Norway were reduced from 1 3 to 1 0 per
cent.
April
Presentation of the Government's Long Term Program 1982-85 to Parliament. Highlights included
strategies aimed at full employment and the development of a more egalitarian and democratic society.
Wage negotiations for the second period of a two-year agreement started. The settlement in the public
sector was concluded first because of breakdown in the negotiations between the two major labour market
organisations in the private sector. The main elements of the agreement for public employees were:
-
an average wage increase of 10.5 per cent from 1980 to 1981 (including 2 percentage points to
compensate for lower growth in public sector wages than in the private sector in recent years);
-
semi-automatic index clause taking effect when the consumer price index exceeds 1 26.5 as from
15th September, 1981.
Wage agreements in the private sector were ruled by the Arbitration Board. The contents of the agreements
corresponded to the outcome in the public sector.
May
Presentation of the Revised National Budget for 1981 to Parliament. The Government announced
measures to tighten fiscal and monetary policy. A few supplementary appropriations were included in the
Budget due to higher price and cost increases than expected. Nominal credit targets were not changed.
Implementation of direct credit regulation from banks to consumers and municipalities. Bank lending was
reduced by Kr. 1 billion and bond market quotas were increased by the same amount.
Interest rates on Treasury bills and government bonds increased by 1 percentage point, to 1 0.5 and 1 2 per
cent respectively.
Interest rates on short-term loans from private banks and insurance companies were allowed to increase
by 1 percentage point.
Primary reserve requirements were reduced to 8 per cent for saving banks and commercial banks in
Southern Norway.
August
Economic policy package was presented, including:
i)
i'i)
Price-freeze from 3rd August till end-year.
Reductions of personal taxes for 1981 were proposed:
-
lïi)
0.5 per cent for the first Kr. 100 000.
- 0.3 per cent for the next Kr. 50 000.
Proposal of Kr. 500 increase in basic pensions as of 1st October.
These measures prevented the triggering of the index clause in the wage agreements.
Introduction of stimulatory measures to combat unemployment in the construction sector, especially in
the northern part of Norway.
Bond issues from private credit institutions for the rest of 1981 limited to financing of exports and
shipbuilding.
September
Private banks' deposit of foreign currency with foreign banks were exempted from reserve require¬
ments.
October
The Labour Government presented the National Budget 1982 and the proposal for central government
and social security budgets for 1982:
49
/)
Deficit as per cent of GDP excluding oil and shipping was planned to decrease from 7. 1 in 1 98 1 to
6.5 in 1982.
ii)
ii'i)
Total supply of credit to the private sector and municipalities in 1982 was fixed at a somewhat
lower share of GDP (excluding oil activities and shipping) than in 1981.
The interest rate on ioans from the State banks, except loans for dwellings, was raised by 1
percentage point as from 1st January, 1982.
Following general elections to Parliament in September a minority conservative Government took
office.
The new Government presented a supplement to the budget. The main modifications were:
i)
ii)
Reductions in personal income taxes by Kr.2 125 million on an accrual basis, implying that the
real increase in personal taxation proposed in the original budget proposals will be avoided.
Reduction of central government expenditure by Kr. 1 344 million. The budget balance should
therefore remain roughly unchanged.
ii'i)
Commitment quotas of the State banks were reduced by Kr. 900 million, and private banks were
expected to play a larger role in the financing of new dwellings in 1 982 compared with assumptions
in the National Budget,
iv)
New measures to increase private savings. An indexed government bond loan will be launched in
January aiming at reducing households' liquidity by Kr. 1000 million. Higher limits for personal
savings with tax privileges were also introduced,
Withdrawal of the proposal of two additional holidays in 1983.
v)
November
Primary reserve requirements for private banks in Southern Norway raised from 8 to 1 0 per cent.
December
The final central government and social security budgets were presented to Parliament. The deficit
before loan transactions (excluding oil tax revenue) was estimated at Kr. 19.2 and Kr. 19.0 billions in 1981
and 1982 respectively.
1982
The price freeze introduced in August 1981 expired.
The bond investment obligation for private banks in Southern Norway was reduced from 30 to 20 per cent
and from 60 to 40 per cent for life-insurance companies.
Average ceilings on interest rates were adjusted as follows:
-
14.2 per cent on short-term loans from private banks.
-
1 2 per cent on long-term loans from private banks.
-
10.5 per cent on long-term loans from life-insurance companies.
50
STATISTICAL ANNEX
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û.
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0Û
Table A.
Supply and use of resources (new SNA)
Kr. million, current prices
Consumers' expenditure on goods and services
General government current expenditure on goods and
services
Defence
Civil
Gross fixed capital formation
Change in stocks
National expenditure
Exports of goods and services (non-factor)
Imports of goods and services (non-factor)
Gross domestic product in purchasers' values
Indirect taxes
Subsidies
Gross domestic product at factor cost
Depreciation and other operating provisions
Net domestic product at factor cost
Sources:
Statistical submission to OECD; ©konomisk Utsyn, 1981.
1977
1978
1979
1980p
1981p
52 559
58 287
66 106
77 615
89 486
103 915
1 10 670
120 104
134 894
155 697
17 861
20 390
23 759
28 701
34 087
38 625
43 543
46 585
53 434
62 202
3 215
3 505
3 920
4 750
5 296
5 741
6 360
6 789
8 012
10 204
14 646
16 885
19 839
23 951
28 791
32 884
37 183
39 796
45 422
51 998
27 303
32 752
39 605
50 791
62 000
71 074
67 705
66 186
70 119
88 532
-85
966
4 018
1 544
1 376
-1 576
-6 941
-460
7 630
^793
97 638
112 395
133 488
158 651
186 949
212 038
214 977
232 415
266 077
301 638
40 055
48 730
60 016
62 189
70 173
76 264
87 221
105 407
134 892
155 200
39 290
49 272
63 775
72 139
86 413
96 768
89 119
99 154
117 457
129 900
98 403
111 853
129 729
148 701
170 709
191 534
213 079
238 668
283 512
326 938
18 193
20 331
22 741
26 455
31 012
36 327
37 946
41 425
48 105
55 019
5 233
5 975
7 514
9 258
11 624
14 1)1
16 446
16 743
19 504
21
85 443
97 497
114 502
131 504
151 321
169 318
191 579
213 986
254 911
293 083
13 484
15 213
18 698
21 089
26 280
31 060
34 598
36 878
41 026
46 546
71959
82284
95 804
110415
125 041
138 258
156981
177 108
213 885
246 537
164
Table B.
Supply and use of resources (new SNA)
Kr. million
1972
1973
1974
1975
1975
1976
1977
1970 prices
Consumers' expenditure on goods and services
General government current expenditure on goods
and services
Defence
Civil
Gross fixed capital formation
Change in stocks
National expenditure
Exports of goods and services (non-factor)
Imports of goods and services (non-factor)
Gross domestic product in purchasers' values
<£
Depreciation and other operating provisions
Net domestic product at market prices
Sources:
Statistical submission to OECD; 0konomisk Uisyn, 1981.
1978
1979
^Op
198|r
1975 prices
46 351
47 692
49 531
52 069
77 615
82 332
88 039
86 606
89 389
91388
92 601
15 000
15 818
16 454
17 510
28 701
30 819
32 339
34 068
35 277
36 937
38 755
2 760
2 802
2 736
2 952
4 750
4 776
4 769
4 959
5 137
5 524
6 373
12 240
13 016
13 718
14 558
23 951
26 043
27 570
29 109
30 140
31413
32 382
24 139
89
27 431
292
28 829
2 842
32 265
1548
50 791
1544
55 933
1579
57 968
-1727
51471
-5 418
48 912
-649
48 577
3 992
56 575
-5 183
85 579
91233
97 656
103 392
158 651
170 663
176 619
166 727
172 929
180 894
182 748
38 543
36 270
41737
41506
42 021
43 463
43 319
46 487
62 189
72 139
69 191
81023
71704
83 807
77 718
72 459
79 724
71954
81461
74 574
82 261
75 974
87 852
91464
96 214
100 224
148 701
158 831
164 516
171986
180 699
187 781
lo9 035
12 084
12 753
13 714
14 267
21089
23 812
25 732
26 806
27 691
28 535
29 700
75 768
78 711
82 500
85 957
127 612
135 019
138 784
145 180
153 008
159 246
159 335
Table C.
Gross domestic product by industry of origin (new SNA)
Kr. million, current prices
1979
Agriculture, forestry and fishing
Mining and quarrying, incl. oil exploitation
Manufacturing
Electricity, gas and water
Construction, incl. oil drilling
Maritime transport
Other transport, storage and communication'
Wholesale and retail trade
Banking and insurance
1980p
1981p
5 691
6 340
7 494
8 236
9 655
11025
11392
11712
12 715
14 593
954
1 042
1 488
4 533
7 141
8 330
13 814
21870
41963
50 292
21 561
24 279
27 728
32 301
34 316
36 214
38 313
43 542
43 678
50 497
3006
3 451
4 387
5 037
5 736
5 984
7 618
8 805
9 666
12 109
7 875
8 418
10 258
11 527
12 785
15 040
17 265
17 325
19 189
21 939
13 450
8 448
10 178
11 400
9 253
9 221
9 075
9 773
10 929
12 587
6 100
6 691
7 598
8 695
10 246
11 629
13 404
14 549
16 348
19 542
13 400
15 520
17 416
19 573
22 901
25 828
28 490
29 214
36 040
41
4 674
5 438
6 696
7 770
9 170
10 634
11 798
14 577
17 003
20 426
136
Hotels and restaurants
1 320
1 417
1 594
1 928
2 219
2 698
3 003
3 216
3 665
4 334
Dwellings
Commercial buildings
4 102
4 587
5 225
5 930
6 692
7 564
8 247
8 991
10 105
11 906
Community, social and personal services
less: Imputed bank service charge
Other correction items
785
885
1 061
1 248
1 464
1 882
2 063
2 284
2 738
3 040
17 660
20 324
23 099
27 874
33 251
38 214
42 649
45 487
51 225
58 761
2 316
2 757
3 635
4 061
4 959
5 629
6 158
7 278
8 727
10 963
5 143
6 040
7 920
8 856
10 870
13 046
11 408
13 445
15 317
15 876
98 403
111853
129 729
148 701
170 709
191534
213 079
238 668
283 512
326 938
en
Gross domestic product in purchasers' values
I. Including pipeline transportation of oil and gas.
Sources: Statistical submission to OECD; Okonomisk Utsyn, 1981.
Table D.
Gross domestic product by industry of origin (new SNA)
Kr. million
1972
1973
1970
Agriculture, forestry and fishing
Mining and quarrying, incl. oil exploitation
Manufacturing
Electricity, gas and water
Construction, incl. oil drilling
Maritime transport
1975
1975
1976
1977
1978
1979
mw
I981T
1975 prices
5 442
5 373
5 953
5 718
8 236
8 521
8 646
8 355
8 609
8 938
9 362
1 246
1
1
152
3 012
4 533
6 740
7 334
11 772
14 174
17 395
16 991
32 090
191
18 953
19 958
20 866
20 252
32 301
32 446
31 993
31 430
32 099
32 513
2 744
3 019
3 327
3 331
5 037
5 314
4 849
5 377
5 890
5 543
6 024
6 897
6 970
7 478
7 776
11 527
11 780
12715
14 005
13 894
14 272
14 467
8 335
9 002
9 479
9 167
9 254
10 853
11
264
10 766
10313
10 341
10 372
5 275
5 380
5 608
5 852
8 695
9 326
9 698
10612
11 850
12 329
12 527
12 079
12 577
13 381
14 203
19 573
20 680
21 776
22 071
22 924
23 246
23 502
Banking and insurance
3 618
3 645
3 661
3 628
7 770
8 179
8 562
8 726
9 270
9 620
9 957
Hotels and restaurants
1 084
1 051
1
1
154
1 928
1 931
1 941
1 947
2 015
2 116
2 007
Dwellings
Commercial buildings
3 673
3 844
4 047
4 273
5 930
6 260
613
6 700
7 027
7 367
7 736
736
770
847
945
1 248
1 384
1 594
1 711
1 825
2 205
2 216
14 734
15 525
15 978
16 892
27 874
30 202
31 808
33 308
34 753
35 761
36 794
Other transport, storage and communication1
Wholesale and retail trade
Community, social and personal services
less: Imputed bank service charge
en
1974
iriccs
Other correction items
Gross domestic product in purchasers' values
1. Including pipeline transportation of oil and gas.
Sources: Statistical submission to OECD; Okonomisk Vtsyn, 1981.
106
6
1 856
1 899
1 965
1 947
4 061
4 240
4 363
4 480
4 610
4 859
5 010
4 892
5 058
5 296
5 968
8 856
9 455
10 086
9 686
10 666
10 994
10 000
87 852
91464
96 214
100 224
148 701
158 831
164 516
171986
180 699
187 781
189 035
Table E.
General government income and expenditure (new SNA)
Kr. million
1972
1973
1974
1975
1977
1976
1978
1979
1980f
1981'
Current revenue
47 646
55 473
62 934
73 798
86 819
97 610
110 888
124 152
153 016
172 059
Indirect taxes
18 193
20 331
22 741
26 455
31 012
36 327
37 946
41 425
48 105
55 019
Social security contributions
12 455
15 330
17 023
19 863
21 866
24 733
27 757
74 115
95 279
105 005
Direct taxes
14 897
17 372
19 979
23 790
29 464
31
583
37 900
2 070
2 402
3 150
3 646
4 421
4 907
7 219
8 514
9 524
11 910
38
41
44
56
60
66
98
108
125
Income from property and entrepreneurship
Other current transfers
Current expenditure
Purchase of goods and services
Defence
Civil
31
38 920
44 620
51 880
62 151
74 696
86 700
100 678
1 1 1 220
127 819
146 139
17 861
20 390
23 759
28 701
34 087
38 625
43 543
46 585
53 434
62 202
3 215
3 505
3 920
4 750
5 296
5 742
6 360
6 789
8 012
10 204
14 646
16 886
19 838
23 952
28 791
32 884
37 183
39 796
45 422
51 998
19 504
21
11
12 356
164
Subsidies
5 233
5 975
7 514
9 258
11 624
14 111
16 446
16 743
Interest on the public debt
1 921
2 248
2 683
3 156
4 221
5 467
7 015
8 931
13 906
16 607
17 925
21 036
24 763
28 497
33 674
38 961
43 717
50 417
13 522
15 557
17 257
20 154
23 679
27 049
31 916
37 023
41 553
47 932
384
450
668
882
1 084
1 448
1 758
1 938
2 164
2 485
8 725
10 853
11 053
11 647
750
857
1 011
Gross saving
9 475
11 710
Gross fixed capital formation
5 014
5 289
Net lending
4 461
48
Current transfers
To households, etc.
To the rest of the world
Net current saving
Depreciation and other operating provisions
164
12 124
10 910
10 210
12 932
25 197
25 920
154
1 380
1 616
1 868
2 026
2 300
2 550
12 064
12 801
13 504
12 526
12 078
14 958
27 497
28 470
6 009
7 121
8 154
9 322
10 737
10 343
11 362
11 000
6 421
6 055
5 680
5 350
3 204
1341
4 615
16 135
17 470
75
138
1 364
3 223
3 333
6 057
9 923
22 833
27 900
1
Memorandum item:
Revenue from oil sector
1.
Preliminary estimates.
Source: Central Bureau of Statistics.
Table F.
Production by sector
Mining and manufacturing
Industrial production1, 1975 - 100
By sector o production
By destination
Input
Total
Mining
Manufacturing
Exports
Consumption
Investment
in building
Other input
and construction
1972
86
41
94
87
94
76
87
1973
91
40
99
95
96
92
90
86
1974
95
38
103
95
100
99
96
97
1975
100
100
100
100
100
100
100
100
1976
106
149
100
116
103
108
102
96
1977
105
162
99
115
108
115
106
102
1978
116
260
97
130
109
111
111
95
1979
125
313
99
138
110
112
107
104
1980
132
382
101
148
109
113
106
102
1981
132
374
100
146
110
114
105
104
I.
oo
Averages of monthly figures.
Sources:
Central Bureau of Statistics, Monthly Bulletin of Statistics; Statisiisk Ukehefte.
82
Table G.
Labour market and employment
Employment
Labour market
Registered
Jobs vacant1
unemployment
Self
1 000 persons
Employees ( 1 000 persons)2
1 000 1nan-years
Thousands
employed
Employees
Total
Agriculture,
Mining and
forestry
fishing
facturing
manu¬
Building
Maritime transp..
Commerce
and construction
other transport
Public adm.
Other
and commun.
1972
14.8
8.5
254
1 311
1 649
201
402
145
230
162
78
431
1973
12.8
8.2
251
1 320
1 654
189
401
142
234
163
76
449
1974
10.7
9.9
244
1 349
1 659
175
402
147
242
163
71
459
1975
19.6
6.0
238
1 358
1 707
159
423
147
238
158
85
497
1976
19.9
6.8
235
1 389
1 789
168
426
148
264
161
92
530
1977
16.1
8.8
232
1 425
1 824
165
419
156
274
171
89
550
1978
20.0
7.0
231
1 444
1 854
161
408
163
277
170
91
584
1979
24.1
6.2
231
1 455
1 872
161
397
151
277
172
92
622
1980
22.3
8.0
231
1 484
1 914
161
401
146
287
171
99
649
1981
28.4
6.7
228
1 494
1 932
165
404
150
296
178
100
639
.
1.
2.
Averages of number of unfilled vacancies at the end of the month.
The previous employment statistics were discontinued in 1970. Figures from 1972 represent Labour Market Survey estimates.
3.
Sources: Central Bureau of Statistics, Monthly Bulletin of Statistics, and Statist isk Ukehefte.
Table H.
Balance of payments
National accounts basis
Kr. million
1974
1975
1976
1977
1978
60 016
35 028
62 189
70 173
76 264
87 221
105 407
134 892
155 200
38 140
43 853
48 747
57 863
70 007
92 857
490
105 700
3 443
6 660
8 111
13 598
21 993
41 399
46 800
30
1 050
359
940
438
1 875
103
33 560
41 682
47 193
52 295
4 730
1980e
Goods and services
Exports, total
Commodities
Crude petroleum and natural gas from the North Sea
Direct exports in connection with oil activity1
Other commodities
28 458
-
27 016
30 707
31
6 080
7 681
6 456
8 483
10 340
5 392
3 827
New
2 008
4 735
3 697
4 882
6 701
1 467
1 402
750
Second-hand
4 072
2 946
2 759
3 601
3 645
3 925
2 425
3 980
24 988
24 049
26 320
27 517
29 358
35 400
42 035
49 500
19 503
17 390
17 877
18 394
19 165
23 182
27 779
32 800
Travel
1 491
1 924
2 223
2 586
3 018
3 228
3 716
4 450
Other services
3 994
4 681
5 844
6 048
5 934
6 741
7 751
8 880
54
376
489
1 241
2 249
2 789
3 370
63 775
72 139
86 413
96 768
89 119
99 154
117 457
129 900
49 004
54 366
64 713
72 002
61 979
70 433
84 477
90 400
2 306
3 660
4 048
3 351
1 713
1 017
761
925
41 288
44 121
51 488
59 706
56 457
65 828
82 282
85 410
5 410
6 585
9 177
8 945
3 809
3 588
1 434
4 065
5 134
6 105
8 434
8 643
3 692
2 910
1
3 435
276
480
743
302
117
678
326
630
14 771
17 773
21 700
24 766
27 140
28 721
32 980
39 500
Gross expenditures in connection with shipping and oil drilling
8 035
8 120
9 015
9 763
10 244
13 100
16 554
19 950
Direct imports in connection with other oil activity
1
188
2 090
3 460
3 884
3 117
2 175
1 580
2 205
Travel
2 001
2 908
3 522
4 639
5 661
6 042
6 486
8 150
Other services
3 547
4 655
5 703
6 480
8 118
7 404
8 360
9 195
-3 759
-9 950
-16 240
-20 504
-1 898
6 253
17 435
25 300
Ships and oil platforms
O
-
Services
Gross receipts in connection with shipping and oil drilling
Other oil activity
Imports, total
Commodities
Direct imports in connection with oil activity
Other commodities
Ships and oil platforms
New
Second-hand
Services
Net goods and services
of which:
Selected items in connection with shipping2
10 398
5 111
3 428
3 776
8 428
Selected items in connection with oil activity3
-3 272
-1 733
-1 456
876
10 038
108
Interest and transfers, net
-2 405
-2 742
130
-6 298
-9 107
-11 531
-1 1 940
-13 200
2 485
2 320
2 287
2 413
3 006
3 931
5 990
9 300
1 955
1 791
1 758
1 870
2 453
3 337
5 235
8 400
530
529
529
543
553
594
755
900
4 890
5 062
6 417
8711
12 113
15 462
17 930
22 500
Interests and dividends
3 802
3 706
4 806
6 603
9 635
12 663
14 839
18 815
Transfers
1 088
1 356
1 611
2 108
2 478
2 799
3 091
3 685
4 164
-12 692
-20 370
-26 802
-11 005
-5 278
5 495
12 100
5 985
13 480
17 090
22 889
16 842
From abroad, total
Interest and dividends
Transfers
To abroad, total
Current Balance
Long-term capital, net
Official
11
535
^1094
8
4 659
4 771
6 377
10 000
4 643
-1 743
-2
415
930
3 427
4 812
4 941
2 128
Shipping companies
1 316
1 350
1 815
1 938
179
187
-274
Direct investment
1
105
211
977
3 435
2 232
1 804
-963
Other
3 564
6 961
8 857
7 592
3 172
-40
-3 242
-179
788
-3 280
-3 913
5 837
6 257
1 401
Financial institutions
Basic Balance
SDR allocations
-
Valuation adjustment
-72
Short-term capital and errors and omissions
Change in gold and foreign exchange reserves
-
-1
_
_
-3
201
199
-4 606
-414
2 579
2 860
_
187
1 861
440
1 649
-6 827
-1 436
667
189
1 250
-1 686
-527
4 091
4 608
4 846
10 648
11 898
10 212
9 685
13 776
18 384
23 230
-3 295
-1
145
Memorandum item:
Gold and foreign exchange reserves, end of period
1 . Including adjustments owing to the distribution of investment expenditures in respect of oil fields and gas fields developed in co-operation with United Kingdom.
2. Including net freight earnings from shipping, exports of second-hand ships and imports of ships.
3. Including exports of crude petroleum and natural gas, pipeline services, net receipts from oil drilling and second-hand oil platforms; imports of oil platforms and commodities and services direct to the North Sea.
Sources: Central Bureau of Statistics, National Accounts 1968-1979. and Statislisk Ukehefle.
Table I.
Foreign trade, total and by area
$ million, monthly rates
Exports, fob
Imports, cif
OECD countries
OECD countries
Non-OECD countries
OECD Europe
Total
Total
Comecon
Total
EEC
OECD
OPEC
Non-OECD countries
Europe
Comecon
Total
Others
EEC
Others
OPEC
Others
Others
1972
364.4
317.4
163.7
97.1
11.8
11.9
23.6
273.4
234.)
137.2
70.9
10.1
4.3
25.2
1973
518.2
451.6
234.2
128.1
15.6
17.8
33.2
390.0
318.9
184.7
101.6
13.7
6.6
50.3
1974
703.1
598.3
294.3
179.8
19.7
46.3
38.9
524.3
430.2
246.4
142.4
22.1
7.9
64.2
1975
806.2
695.4
352.7
215.6
21.5
34.4
54.9
599.6
499.1
310.5
141.6
32.0
12.4
56.1
1976
925.7
789.2
411.1
231.9
29.3
56.1
51.1
659.8
553.8
370.0
136.5
24.7
16.3
65.1
1977
1 072.8
923.2
486.2
273.0
33.9
53.4
62.3
726.0
587.6
396.6
147.5
31.5
20.8
86.1
1978
951.9
816.7
428.1
257.9
27.7
49.7
57.6
836.6
699.5
496.5
142.0
32.6
18.1
84.2
121.1
969.6
716.4
183.4
21.6
21.2
108.7
1 376.1
1 094.2
212.8
22.6
34.6
107.7
1979
1
143.9
997.0
539.2
307.3
33.2
35.0
78.8
1
1980
1 413.0
1 236.2
677.8
351.3
30.8
47.4
98.6
1 541.0
Source:
OECD, Foreign Trade Statistics. Series A.
CJ\
Table J.
Consumer prices.
Prices and wages
Wholesale price . 1977 - 100
979 =-- 100
Kroner
Industry
or.
Total
Food
Rent, heating
and light
Total
Consumer goods
Input
Investment goods
Males
Females
1972
56.4
62
66
66
63
16.82
12.82
1973
60.7
67
71
69
68
18.61
14.18
1974
66.4
66
66
80
78
75
82
21.83
16.75
1975
74.1
76
72
87
87
85
87
26.15
20.41
1976
80.9
8«
78
94
93
95
93
30.44'
24.16'
1977
88.2
91
85
100
100
100
100
33.77
26.96
1978
95.4
96
94
105
107
107
105
36.44
29.24
1979
100.0
100
100
114
114
113
110
37.47
30.15
1980
110.9
109
112
131
127
121
124
40.97
33.55
1981
126.0
127
127
145
143
128
136
45.24
I. From 1.4.1976 the number of normal weekly working hours has been reduced from 42Vi to 40.
Source: Central Bureau of Statistics, Monthly Bulletin of Statistics.
.
Table K.
Money and credit
Kr. million
Money supply
Liquidity supply
Due to trans, by
Central
Quasi-
(IMFdef.)1
moncy
(savings
Orig.
Adj.
deposits)
Central
Govt.
Bank
Public
Domestic lending by financial institutions
sector
deposits
with
Central
Central
Bank
Bank
Kr. 1 000 million
Insur¬
Mortgage
Private
Savings
Slate
ance
credit
financial
banks
Banks
com-
insti-
insti¬
panies
luttons
tutions
Com¬
mercial
banks
During period
savings
banks
End of period
1971
2 023
-243
2 266
19.21
17.77
33.72
2 976
68 399
209
17 000
14 040
20 863
6 551
6 364
2 760
619
1972
1 099
-1 347
2 446
22.39
20.67
37.18
4 281
77251
1 008
19 323
15 570
24 407
7 094
7 156
3 057
660
1973
997
-1 217
2 214
25.81
23.81
41.80
5 574
87 605
1 410
21 708
17 546
28 157
7 773
8 275
3 180
817
1974
539
-1 215
1 754
28.87
26.63
46.22
5 590
98 627
2 065
24 283
19 942
31871
8 621
9 449
3 410
981
1975
390
2 123
-1
733
33.65
31.07
52.94
6 263
114 750
1 266
28 6533
22 8073
37 166
9 503
11 273
3 455
1 243
1976
2 953
6 834
-3 881
32.42
31.63
63.23
5 678
134 609
1 355
33 036
26 330
43 985
10 689
14 992
3 775
1
1977
2 737
7 829
-5 092
37.00
36.10
75.16
7 128
157 903
5 492
38 749
30 463
52 653
11 434
19 465
4 162
1 983
1978
-I 220
5 270
-6 490
40.19
39.25
85.82
6 070
179 793
2 139
41 653
33 362
64 394
12 538
21 776
5 103
2 345
1979
2 098
2 196
-98
43.25
42.20
99.58
8 337
203 797
1
188
45 691
37 700
75 944
13 570
25 027
5 375
2 722
1980
11 814
-2 217
14 031
45.56
44.45
112.97
10 181
227 020
814
49 998
41 882
86 454
14 585
29 537
5 773
2 884
1.
2.
Notes in circulation and demand deposits with the banking system.
Breakdown does not add up total.
3.
From 31.1.1977 all receipts and expenditure are gross figures.
Source : Central Bureau of Statistics, Monthly Bulletin of Statistics.
Domestic credit by borrowing sector
(2)
Bond issues
of which:
Munici¬
palities
Mining
Total
Gold and foreign
exchange holdings
The security market
Business
(0
525
Agriculture,
Fishing
and
(3)
Wage
earners
Sum
(l)+(2)+(3)
of which:
Share
Domestic
issues
Total1
manufac¬
IMF
currency
DOS.)
turing
End of period
Official
(incl.
and foreign
During period
Commercial
banks and
savings
S mill, end of period
1971
4 647
726
1 042
1
154
-177
1972
5 700
812
1 213
1 325
-200
19/3
7 318
1 696
1 790
1 542
-170
1974
8 193
876
1 861
1 755
-310
1975
17 491
1 455
2 207
2 362
-335
^»12
19/6
12 497
61 038
7 884
21
123
64 130
137 665
15 870
1 372
1 743
2 103
197/
15 414
70 895
9 219
25 913
74 699
161 005
22 400
1 625
1 820
1 592
94
19/8
19 915
80 879
10 814
29 229
82 605
183 399
24 485
1 730
2 628
2 720
-214
19/9
26 530
88 668
12 387
31346
92 159
207 357
24 735
1 685
3 642
4 064
-753
1980
30 353
94 567
13 859
32 715
105 605
230 525
22 480
2 749
4 632
6 288
-2 346
I.
According to new definition adopted in January' 1971.
Sources: Central Bureau of Statistics, Monthly Bulletin of Statistics: Central Bank, Economic Bulletin: IMF, International Financial Statistics and OECD, Main Economic Indicators.
BASIC STATISTICS:
INTERNATIONAL COMPARISONS
BASIC STATISTICS: INTERNATIONAL COMPARISONS
Population
Inhabitants per sq. km cf land area
Net average annual increase
ustralia
Reference period
Units
Mid-1980
Thousands
»
Number
Mid-1970 to Mid-1980
%
1980
Thousands
, 6 242
»
% of total
'
Austria
Belgium
Canada
Denmark
Finland
France
Germany
Greece
Iceland
Ireland
Italy
Japan
Luxem
Nether
New
bourg
lands
Zealand
Norway
Portugal
Spain
Sweden
Switzer¬
land
Turkey
United
United
Yugo
Kingdom
States
slavia1
22 340
14616
7 509
9 857
23 959
5 125
4 780
53 713
61 566
9 599
229
3 401
116 782
365
14144
3 131
4 087
9 966
37 381
8316
6 373
45 078
56 010
227 658
2
89
323
2
119
16
97
248
73
2
48
189
309
141
418
12
13
108
74
18
154
58
230
24
87
1.4
0.1
0.2
1.2
0.4
0.4
0.6
0.1
0.9
1.1
1.4
0.6
1.2
0.7
0.8
1.1
0.5
'1.0
1.1
0.3
0.2
2.4
0.1
1.1
0.9
57 042»
i
Total civilian
Employment
of which: Agriculture, forestry, fishing
Industry4
Other
»
1980
Gross domestic product at market prices
Average annual volume growth0
1975
to
US S billion11
1980
/o
US S11
1980
Per capita
formation
1980
% of GDP
of which : Transport, machinery and equipment
1979
»
Gross
fixed
capital
Residential construction
Average annual volume growth'
6.5
»
1975
Gross saving ratio1*
to
10.5
10 655
(2 470)
2 192
21 142
25 265
(3 347)
(101)
1 149
20 572
55 360
159
4 677
1 270
1 914
3 951
11254
4 232
3 012
14 610
24 397
97 270
3.0
5.5
(8.1)
11.6
8.8
6.0
(29.7)
(H-9)
19.1
14.2
10.4
5.7
6.0
11.0
8.5
28.3
18.9
5.6
7.2
60.4
2.6
3.6
(28.6)
(63.3)
34.4
35.9
44.8
(30.0)
(37.6)
32.4
37.8
35.3
38.2
31.8
33.6
29.7
35.7
36.1
32.2
39.5
16.3
38.0
30.6
22.3
54.0
55.3
49.2
(40.3)
(50.5)
48.5
48.0
54.3
56.1
62.2
55.4
61.8
36.0
45.0
62.2
53.3
23.3
59.4
65.8
41.9
1040.0
23.3»
3 751
9 690»
31.0
40.3
34.8
28.5
62.5
49.2
62.2
66.0
140.0
77.0
116.5
253.3
66.4
49.9
651.9
40.4
2.8
17.8
394.0
4.6
167.6
57.3
24.1
211.1
122.8
101.5
52.9
522.9
2 587.1
2.5
3.5
2.9
3.0
2.6
3.1
3.3
3.6
4.4
3.7
3.9
3.8
5.1
2.3
2.5
0.7
4.6
5.2
2.2
1.2
1.6
2.8
1.6
3.9
5.6
9 580
10 250
11 820
10 580
12 950
10440
12 140
13 310
4210
12 410
5 190
6 910
8 910
12 570
11 850
7 442
14 020
2 430
5 650
14 760
15 920
1 170
9 340
11360
2 516
22.8
25.3
21.4
23.1
18.3
24.6
21.6
23.6
26.5
27.9
25.3
20.9
19.6
20.3
23.8
18.0
17.8
18.2
35.5
9.8
6.0
8.1
7.6
8.6
9.2
9.1
8.6
7.3
7.1
9.3
7.4
14.2
6.5
5.3
6.9
6.3
6.4
6.5
2.2
1.6
2.3
-0.3
-2.2
2.0
5.2
26.2
16.3
21.5
14.4
24.8
21.7
23.1
4.2"
»
1980
3 070
%
1.6
1980
% of GDP
21.4"
819.1
56.2s
20.0
31.7
21.0
17.8
25.0
6.6
9.8»
8.0
10.7
9.2"
8.7
7.8
9.9
7.1
9.2
5.7
6.4»
5.1
7.4
6.6"
5.8
3.3
5.3
3.7
3.8
3.0
4.8
7.2
3.8
2.3
7.6
3.5
4.7
1.1
1.4
-7.7
-0.5
4-7
^0.9
-0.2
2.2
-0.2
0.3
3.3
5.7
25.6
24.5
19.8
22,3
30.7
50.1
20.1
19.3»
29.9
20.5
18.9
17.3
26.7
16.6
19.2
18.3
37.0
16.0»
17.6
23.5»
6.9»
5.0
General government
1979
% of GDP
16.2
18.0
17.7
19.4
25.2
18.4
14.9
20.0
16.3
11.7
20.0
16.1
9.8
15.9
18.1
19.7
14.8
10.8
28.4
12.9
13.7
20.0
17.4
Current disbursements13
»
»
29.6"
42.2
46.2
35.8
49.4
34.6
42.1
40.9
29.7
25.0"
41 .7»
41.1
24.2
43.5
55.1
47.1
30.7
26.7
56.8
29.9
23.4
40.0
31.5
Current receipts
»
»
32.5"
44.2
43.2
35.8
50.3
38.2
43.4
42.9
30.6
34.0"
37.8"
35.7
26.6
52.2
55.8
52.2
26.9
27.5
57.4
33.2
23.8
39.0
32.5
0.5
0.2
0.5
0.4
0.7
0.2
0.6
0.4
0.2
0.3
0.8
0.2
0.3
0.3
5 800
5 650
7 540
5 950
7 270
5 720
7 690
7 340
2 750
7 560
3 310
4 270
5 220
479
272
302
219
235
327
346
80
339
194
300
185
Current expenditure on goods and services
'/. of GNP
1980
Net official development assistance
1.0
0.3
0.8
7 430
7 200
4 550
6 600
1 790
3 950
7 630
10128
5 581
7 370
1343
423
288
395
282
118
178
345
324
II"
256
536
85
460
547
486
5451»
423
132
294
772
700
39
480
793
239»
293"
279
259"
270"
185"
363"
285"
44"
324
571"
Indicators of living standards
US $"
1980
Private consumption per capita
Passenger cars, per 1 000 inhabitants
Telephones, per 1 000 inhabitants
Television sets, per 1 000 inhabitants
Doctors, per 1 000 inhabitants
1979
1977
»
Full-time school enrolment15
1979
% of age group
Infant mortality17
1980
Number
Number
1978
»
,
1977
;
I
410"
440"
375
352
666
609
470
415
434
281
444"
174
318
351 14
247"
286
428"
338
363"
372
308
127"
214"
193
224
1.8
2.0
44.4
32.0"
2.3
61.3"
64.9"
57.4"
11.0
13.9
11.2"
10.9"
8.8"
1.5"
2.1
1.6
68.5
7.7"
2.0
2.2
55.9
45.41»
45.4s0
10.0
13.5"
18.7"
1.6"
1.7"
5.4"
1.2
2.3
1.2
50.5
43.9"
71.4
12.4"
14.3
7.4
1.1
37.3»
11.5
1.7
65.0
1.4
44.8"
1.8
65.0
J76"
1.5
1.8
33.4"
41.3»
8.7"
12.6"
8.8"
26.0"
11.1
6.1
15.4
9.4
6.0
14.4
8.4
14.5
21.8
1.8"
56.3"
2.0
70.1"
851
0.6
12.7"
1.5
79»
199
1.7
1.3
46.2"
75.0
52.2
11.8
12.6
33.4"
6.7
8.5"
25.7
9.9
2.8
35.5
14.9
8.5
19.0
18.6
10.5
2.3
50.1
14.4
8.9
17.9
Average annual increase
Wages and prices
Hourly earnings in industry18
Consumer prices
1975 to
1980
10.3
7.4
8.8
10.1
11.2
11.1
13.6
6.1
24.2
43.4
16.6
21.2
8.4
10.6
5.3
6.4
8.7
10.4
10.7
10.5
4.1
16.3
41.5
14.1
16.6
6.5
2 068
17 364
64 944
16 740
14 148
111 312
191 688
5 184
924
8 508
77 904
129 588
73 836
5 421
18 492
4644
20 820
30 924
29 616
2 748
115176
220 704
8 568
15.8
22.8
55.7
25.8
25.2
28.2
17.2
23.3
12.3
33.0
47.8
19.8
12.5
46.0
23.3
32.2
19.3
9.8
25.3
29.9
5.2
22.4
8.6
15.2
3.7
9.3
5.9
6.3
6.2
10.5
6.8
6.3
8.9
12.7
9.6
5.9
9.2
4.6
8.1
9.2
2.1
6.3
4.7
4.7
6.7
3.8
0 208
24 252
58 992
19 320
15 612
134 856
185 856
10 632
996
11 148
99 708
141 108
76 872
5 468
16 956
9 300
34 176
33 420
36 336
6 252
120156
241200
14 436
%
14.5
31.8
61.8
23.4
29.1
31.2
20.8
22.5
25.2
35.6
62.6
25.4
13.6
47.9
23.5
29.5
38.7
16.1
27.4
36.7
11.8
23.3
9.4
25.7
%
5.0
9.7
5.5
3.2
3.2
2.3
8.7
7.3
3.9
4.9
10.3
7.6
4.4
4.7
0.9
4.4
0.8
9.0
-4.1
3.9
6.7
0.5
1 2044
6 223
4 029
3 459
1 914
30 994
52 261
1 301
176
2 876
26117
25 717
13 607
353
6100
1784
12 516
3 690
19 374
1442
21492
27 395
1467
10.1
25.7
6.8
17.9
12.3
23.0
28.1
12.2
17.7
25.8
26.2
18.2
17.7
6.5
36.0
19.2
36.6
11.0
53.3
23.1
17.9
11.4
10.2
%
%
»
6.1
Foreign trade
Exports of goods, fob
As percentage of GDP
Average annual volume increase
Imports of goods, cif
As percentage of GDP
Average annual volume increase
US S million11
1980
1975
to
1980
US S million11
1980
»
1975 to
1980
End- 1980
Total official. reserves
REStRVES
As percentage of imports of goods
%
%
»
In
US S million
1980
1.
2.
Partly from national sources.
Total resident population.
3.
Private and socialised
4.
According to the definition used in OECD: Labour Force Statistics: mining, manufacturing,
sector.
construction and utilities (electricity, gas and water).
5.
6.
7.
Social product.
At constant prices.
Including Luxembourg.
%
64 500-
71 6767
9 349T
13.0
8.
Excluding ships operating overseas.
9.
Fiscal year beginning April 1st.
10.
Fiscal year beginning July 1st.
11.
At current prices and exchange rates.
12.
Gross saving = Gross national disposable income minus private
and government consumption.
13.
Current disbursements
Current expenditure on goods and
services plus current transfers and payments of property income.
14.
1976.
15.
9.9"
0.7"
Children aged 15-19.
16.
1974.
17.
18.
Deaths in first year per 1 000 live births.
Figures are not strictly comparable due to differences in coverage.
19.
1978.
20.
1975.
21.
1972.
22.
1977.
23.
1979.
24.
Gold included in reserves is valued at 35 SDR per ounce (see IMF, International Financial Statu-
; ties, series Total Reserves).
25.
i
1976 to
Note:
1980.
Figures within brackets are estimates by the OECD Secretariat.
Sources: Common to all subjects and countries: OECD: Labour Force Statistics, Main Economic Indi¬
cators, National Accounts, Observer, Statistics of Foreign Trade (Series A); Statistical Office of the European
, Communities, Basic Statistics of the Community; IMF, International Financial Statistics; UN, Statistical
j Yearbook.
National sources have also been used when data are not available according to standard international
| definitions.
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