2018年-IMF国际货币组织全球_Norway_Selected_Issues_33页_1mb

Summary of Norway's Selected Issues Paper (September 2018)

Core Content

This document analyzes Norway's economic challenges related to wages and competitiveness, fiscal policy, and public sector balance sheet in the context of its reliance on oil and gas revenues. It emphasizes the need for structural reforms to prepare for a future with declining oil production and to ensure long-term economic sustainability.

Main Points

A. Background: One Country, Two (Interlinked) Economies

• Oil Production Trends: Oil production in Norway peaked in the mid-2000s and is expected to decline starting in the mid-2020s. A new large field is projected to bring a second peak by the early 2020s.
• Economic Structure: Norway's economy is characterized by a dual structure: the oil sector and the non-oil mainland economy. The oil sector has strong spillover effects on the mainland economy.
• Oil's Share in Economy: In 2017, oil and oil-related industries accounted for 1/8 of output and 1/4 of exports. The oil sector directly employed 2% of total employment, with an additional 8% of employment indirectly dependent on it.
• Export Composition: The oil services sector is a major export component, representing 1/3 of mainland exports. It is closely linked to the oil industry and has experienced similar fluctuations.

B. The Literature on Dutch Disease in Norway

• Dutch Disease Overview: A natural resource boom can lead to a real appreciation of the currency through two channels:
  • Spending Effect: Increased income from oil leads to higher demand for non-tradables, increasing their prices and reducing tradable competitiveness.
  • Resource Allocation Effect: Labor and capital are reallocated from tradables to non-tradables, increasing wages and labor costs across the economy.
• Norway's Success in Mitigating Dutch Disease:
  • Strong Institutions: Norway's sovereign wealth fund (SWF) saves oil revenues abroad, decoupling current spending from oil revenues and limiting the spending channel of Dutch Disease.
  • Sectoral Development: The development of the oil services industry has created a new export sector, offsetting the decline in other tradables.
  • Migration: Inward migration during oil booms has helped buffer labor reallocation effects and contain wage pressures.
• Limitations: Despite these efforts, non-oil tradables have experienced declining competitiveness, and wage growth has outpaced productivity in many sectors.

C. Wage and Competitiveness Developments (Last 20 Years)

• Wage Growth Outpaces Productivity: From 1995 to 2013, wage growth in Norway significantly outpaced that of its trade partners. Manufacturing wages rose by 160%, compared to 100% in other Nordics and 80% in Germany.
• Unit Labor Costs (ULC):
  • Non-agricultural ULC increased by over 120% since 1995, far exceeding Nordic peers.
  • Manufacturing ULC rose by 70%, while services saw a moderate increase.
• Real Effective Exchange Rate (REER):
  • The REER based on ULC has appreciated significantly, especially from 1995 to 2013.
  • The REER based on CPI has remained relatively stable, indicating a real appreciation driven by wage growth.
• Wage Moderation:
  • The 2013 amendments to the wage setting agreement aimed to address wage growth imbalances and improve competitiveness.
  • Since the oil downturn, wage growth has moderated, with manufacturing wages averaging less than 2% from 2014 to 2017.

D. Fiscal Policy and Competitiveness

• Fiscal Rule: Norway's fiscal rule limits the use of oil revenues, ensuring fiscal sustainability and containing government spending.
• Sovereign Wealth Fund (SWF): The SWF has grown to 300% of mainland GDP by the end of 2017. This has allowed for larger fiscal deficits in non-oil sectors.
• Fiscal Implications:
  • The expansion of fiscal policy has likely exacerbated cost competitiveness.
  • The public sector balance sheet includes intertemporal financial net worth (IFNW), which accounts for public assets, liabilities, and aging costs.
  • The static balance sheet is used to assess fiscal sustainability, but the intertemporal approach is more comprehensive, as it includes future fiscal paths and aging costs.

E. Conclusions and Challenges Ahead

• Competitiveness Challenges: Non-oil manufacturing sectors have experienced declining competitiveness, with their value added halving since the late 1990s.
• Need for Wage Moderation: To avoid a loss of competitiveness and manage the transition away from oil, wage moderation is essential.
• Fiscal Adjustment: With the current economic upturn, it is appropriate to gradually tighten fiscal policy.
• Aging Pressures: The public sector will bear the brunt of aging costs, making fiscal consolidation and productivity-enhancing spending critical for long-term sustainability.
• Social Compact: The segmented labor market in non-tradable sectors (e.g., retail, construction) may challenge the social compact due to declining union coverage and increased labor migration.

Key Information

• Oil Production: Projected to decline from mid-2020s onward, with a second peak expected in early 2020s.
• Wage Growth: Manufacturing wages increased by 160% since 1995, far exceeding other Nordic countries.
• ULC and REER: Unit labor costs have risen sharply, leading to a significant real appreciation of the currency.
• Fiscal Rule: The fiscal rule has contained procyclicality and government spending, but non-oil deficits have increased to 8% of mainland GDP.
• Public Sector Balance Sheet: Includes financial assets, nonfinancial assets, and aging costs, with IFNW serving as a key indicator of fiscal sustainability.
• Structural Reforms: Needed to reorient spending, moderate wages, and enhance productivity in non-oil sectors.

Challenges and Recommendations

• Wage Moderation: Required to prevent further loss of competitiveness and support non-oil sectors.
• Fiscal Tightening: Should be initiated during the current economic upturn to prepare for aging pressures and declining oil production.
• Structural Consolidation: Necessary to ensure long-term fiscal sustainability and economic resilience.
• Labor Market Adjustments: Need to address segmentation and union coverage decline in non-tradable sectors.
• Public Communication: Important to manage expectations and support wage moderation efforts.

References

• Bjørnland, H. (1998), "The Economic Effects of North Sea Oil on the Manufacturing Sector"
• Bjørnland, H. C. and Thorsrud, L. A. (2016), "Boom or Gloom? Examining the Dutch Disease in Two-speed Economies"
• Cabezon, E. and Henn, C. (2018), "Counting the Oil Money and the Elderly: Norway's Public Sector Balance Sheet"
• Corden, W. M. and Neary, J. P. (1982), "Booming Sector and De-Industrialisation in a Small Open Economy"
• Davis, J. M., Ossowski, R., and Fedelino, A. (2003), "Fiscal Policy Formulation and Implementation in Oil-producing Countries"
• Gylfason, T. (2001), "Natural Resources and Economic Growth: What is the Connection"
• Holmøy, E. and Heide K. M. (2005), "Is Norway Immune to Dutch Disease?"
• Hutchison, M. M. (1994), "Manufacturing Sector Resiliency to Energy Booms"
• Cappelen, A. and Eika, T. (2017), "Immigration and the Dutch Disease"
• Medina, J. P. and Soto, C. (2016), "Commodity Prices and Fiscal Policy in a Commodity Exporting Economy"
• Mohn, K. (2016), "Resource Revenue Management and Wealth Neutrality in Norway"
• Norwegian Government (2013), "Wage Formation and Challenges for the Norwegian Economy"