So far, however, it is difficult to draw any conclusions except that uncertainty has increased. The Norwegian economy is operating at capacity limits and there are few if any available resources in the labour market. Unemployment has declined throughout the country. Unemployment in Western Norway, which increased marginally last year, has returned to its previous level. Unemployment has risen slightly again in Eastern Norway. This reflects lower employment in private services that may be a result of a slight downturn in the ICT industries and retail trade. The Government’s Long-Term programme for 2002-2005, which was approved by the Storting in June 2001, states: "Considerable emphasis must be placed on stabilising fluctuations in the economy in order to ensure appropriate capacity utilisation and low unemployment. Petroleum revenues will gradually be phased into the economy, approximately in step with the expected real return of the Petroleum Fund." Fiscal policy will contribute to stimulating activity in the economy because of the increase in spending of oil revenues. The new guidelines imply that the non-oil deficit will increase in the years ahead. This will provide a substantial fiscal stimulus every year. Summary The tragic events in the US on 11 September will contribute to a further dampening of activity in the American, Asian and European economies. It is too early to predict the long-term effects. Reactions in financial markets have been pronounced. Share prices have fallen sharply. The U.S. dollar has depreciated. Currencies of other economies such as Sweden have depreciated.
Svein Gjedrem: Monetary policy and the outlook for the Norwegian economy Address by Mr Svein Gjedrem, Governor of the Norges Bank, at a meeting of Sparebanken Nord-Norge, Tromsø, 25 September 2001. Please note that the text below may differ slightly from the actual presentation Summary and charts. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 19 September. *  *  *  Norway’s economic policy is based on new guidelines for fiscal and monetary policy. The new guidelines were published by the Government on 29 March 2001 in connection with the presentation of the Government’s Long-Term Programme. The inflation target for monetary policy came into force immediately. The guidelines for fiscal policy were discussed in the Storting in June and were approved by a majority. Monetary policy is oriented towards low and stable inflation. The inflation target is set at 2½ per cent. In general, the direct effects on consumer prices resulting from changes in interest rates, taxes, excise duties and extraordinary temporary disturbances shall not be taken into account. In the 1990s, monetary policy gradually moved further away from the fixed-exchange-rate regime which was practiced from 1986 to 1992. Low and stable inflation is the best contribution monetary policy can make to growth, prosperity and income distribution. In the long term, monetary policy has little effect on the real economy. Low and stable inflation can, however, provide fertile ground for stability and growth.