Timber has steadily found new applications in Borregaard’s products, such as building materials, biofuels and medicine – with timber always as the main raw material.5 Norway’s industry structure is in flux. In the past decades, the manufacturing industry has continued to decline (Chart 8), reflecting increased automation and relocation abroad. Increased prosperity has generated more demand for both private and public services. Employment has shifted towards the service sector. 3 Blomgren, A. et al (2015) “Industribyggerne 2015” [Industry builders 2015]. IRIS Report 2015/031 (Norwegian only). 4 World Bank “Ease of doing business index”. https://data.worldbank.org/indicator/IC.BUS.EASE.XQ. 5 Throughout its history, Borregaard has had various owners and names. See eg Bergh, T. and E. Lange (1989) Foredlet virke – Historien om Borregaard 1889–1989 [Processed timber – The story of Borregaard]. Ad Notam forlag AS, Oslo (Norwegian only), and www.borregaard.no for more information. 10  NORGES BANK  Chart 8 Employment shifts towards services. Annual average change in number of employed in the period 1980 – 2018. Percent  ECONOMIC PERSPECTIVES 14 FEBRUARY 2019  Public services  Private services  Construction  Manufacturing  Agriculture, forestry and mining –3  –2  –1  0  1  2  3  Sources: Stastistics Norway and Norges Bank  The service industry has reaped gains in the form of increased productivity through restructuring and adoption of new technology. The banking industry was among the first to do so. The distributive trade sector has grown in recent decades without any notable increase in employment (Chart 9).
Norges Bank is therefore considering whether the central bank should also offer the public central bank digital currency.8 Like cash, central bank digital currency will be a claim on the central bank. It will have to be designed to be a risk-free alternative to private payment solutions and to function in a contingency in the same way as cash does. It can be based on account systems, as we know them today, or it can be a digital variant of banknotes and coins. The latter alternative will entail a clear distinction between central bank digital currency and banks’ deposit money. In the future, central bank digital currency may be necessary for ensuring an efficient and robust payment system. Its most important purpose will be to underpin confidence in the monetary system. MONETARY STABILITY In order to serve as generally accepted means of payment, money must have a stable value guaranteed in a credible manner. There must be trust that money will be worth as much tomorrow as it is today. This is the primary task of monetary policy. In September 2018, Norges Bank raised the policy rate for the first time in seven years (Chart 11), reflecting the favourable developments in the Norwegian economy. The effects of the fall in oil prices in 2014 have faded, and both output and employment show solid growth. Underlying inflation is close to the 2 percent target. If economic developments prove to be in line with expectations, the policy rate will be raised gradually and cautiously ahead. 7 Kloster, A.