To sum up the international picture: over the past year, growth prospects have been lowered for all the large advanced regions. In Europe, activity is likely to decline this year owing to debt problems and fiscal tightening. Unemployment is on the rise. Fiscal and monetary policy space is limited, or virtually exhausted. Many countries must tighten fiscal policy to reduce debt to a sustainable level. Central banks have responded by communicating that interest rates will be held low for an extended period. And they have stretched the limits of monetary policy to counteract a deeper and more persistent downturn. Chart: GDP growth The economic situation in our external surrounding environment stands in contrast to that of Norway. Domestic activity is particularly high in the oil industry and construction sector, and both employment and the supply of labour are on the increase. Unemployment remains low and stable. Public finances are healthy. Norway’s terms of trade are favourable, with high export prices and low import prices. At the same time, house prices and household debt are still rising. Nonetheless, the Norwegian economy is not unaffected by the turbulence abroad. Developments in Europe and a strong krone exchange rate are adversely affecting some Norwegian export industries, such as the paper, metal, and furniture industries. While other countries have used nontraditional instruments, we have managed to come through by using our main instrument – the key policy rate – which is now 1.5 per cent.
Project Greenback 2.0 is indeed an experiment which allows us to seek answers to the questions that we never understood before. These include the motivation behind the migrant workers for not choosing the formal remittance channels and their propensity to use digital financial services. We have made good progress in understanding these issues. But that is not enough. We wish to understand more about how remittances can be further leveraged to fight poverty. This includes developing greater understanding into: How remittances can be linked to insurance and investment products which would help to break the vicious cycle of poverty; How digital payment and remittances can be used as a tool to support the needs of small rural businesses; From education perspective, how to channel remittances to support provision of quality education for poor children; and From gender perspective, how we can use remittances to drive women entrepreneurships particularly in the era of digital economy. Moving forward, these are the areas that we will continue to explore; and in doing so I have no doubt that there will be more opportunities for all of us to work together again. 3/3  BIS central bankers' speeches