Low oil prices, slower growth and increased unemployment means that 2017 is likely to be challenging, is the concensus amongst several economists.
Whilst the government and their supporting parties discuss next year’s budget, Dagbladet invited three leading economists – Elisabeth Holvik SpareBank1, Øystein Dørum DNB and Marius Gonsholt Hov Handelsbanken – to say something about the challenges that await the Norwegian economy in 2017.
They all agree that unemployment will increase and eventually reach a peak of 5 percent or slightly higher.
– When tax revenues fall, there will be less scope for increasing the number of public sector employees. At the same time new school leavers will enter the labour market. Many people choose to take additional education , but they will eventually also join the labour market, said Holvik.
Whilst Dørum thinks oil prices will rise to around 70 dollars a barrel, Holvik thinks it will stabilize around 50, whilst Hov thinks it can rise to 54 dollars.
– With low oil prices, the activity related to the oil sector will be much lower than we are used to, and tax revenues and employment will be lower, says Holvik.
The three are not quite agreeing on how much oil money we can use. Whilst there is some room for maneuver in the short term, high oil spending is not sustainable in the long term, says Dørum.
Source: NTB scanpix / Norway Today