The petroleum sector employs only a small part of the total labour force, but brings in substantial revenues. A main question for Norwegian economic policy is therefore how to stabilise the Norwegian economy in the face of high, fluctuating revenues from the petroleum sector. 3. The importance of the petroleum sector  Some figures will illustrate the importance of the petroleum sector in the Norwegian economy. Oil production started in the 1970s and has gradually increased. Given the current estimates for existing resources, production is expected to be at its maximum level between the years 2000 and 2010, and then decrease gradually as the remaining resources are reduced. The level of future oil production is highly uncertain. Employment in the petroleum sector and related industries is only around 4% of total employment. Investment in the petroleum sector has been substantial compared to investment in the rest of the economy, and as a share of GDP. Investment has an import share of about 1/3, which means that investment relating to the petroleum sector has had a substantial effect on industries in mainland Norway. The income from petroleum extraction is of substantial significance to the Norwegian economy and to the public sector in particular. In the 1990s the export value of oil has been around 1/3 of total exports excluding ships and oil rigs. The petroleum sector is an important source of revenues for the government, both through taxes and through direct government ownership. 1  BIS Review 121/1999  Petroleum production. In mill. Sm3 o.e.
Mr Gjedrem reports on the Norwegian economy and monetary policy in Norway  Speech given by Mr Svein Gjedrem, Governor of the Norges Bank, at the Royal Norwegian Embassy, in London on 28 October 1999. * 1. *  *  Introduction  Ambassador, ladies and gentlemen, I am happy to have this opportunity to speak to you about monetary policy in Norway. What happens in the financial community in London is important to the Norwegian economy: the financial markets here provide substantial loans for Norwegian firms, and are at the same time an important recipient of Norwegian financial investments. Short-term capital movements between United Kingdom and Norway are also important. Against this background, I would like to share with you information about the Norwegian economy. My focus will be on explaining distinctive aspects of the Norwegian economy, which is based largely on a limited number of commodities. My hope is that this understanding may help market operators to make informed decisions when dealing with Norwegian markets. 2. Background  Trend GDP growth in the Norwegian mainland economy is about 2–2¼%, and the inflation rate is around 2%. GDP per capita is slightly higher than in most other European countries. The high level of per capita income is partly a result of extensive revenues from oil and gas extraction. These revenues also allow Norway to operate with a substantial current account and government budget surplus. Extraction of North Sea oil started in the 1970s, and the production volume has increased over the years.