Chart: High productivity in retail sales 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 retail trade sector has grown in recent decades without any notable increase in employment. Productivity growth has been high. Use of new technology and the shift away from private shops to chain stores have reduced distribution and administration costs. Digital technology is now driving yet another shift, towards online shopping. In other areas, intermediaries are changing or disappearing. Travel, cinema tickets and doctor appointments are bought or made online. Government agencies, banks and insurance companies are offering more and more do-it-yourself online services. Restructuring involves job losses, with potentially painful consequences for those affected. But over time labour is made available for employment in other better-paid jobs, generating gains in the form of cheaper goods and services. Structural change is the basis for growth and welfare. Monetary stability Let me turn to the current situation and outlook for the Norwegian economy. Chart: Stronger upturn in the Norwegian economy In September 2018, Norges Bank raised the policy rate for the first time in seven years, reflecting the favourable developments in the Norwegian economy. In March this year, the bank raised the policy rate further. The rate is now at 1 percent. Growth in the Norwegian economy has been solid since autumn 2016. Employment has risen, and unemployment has declined.
Øystein Olsen: Economic perspectives Address by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), to foreign embassy representatives, Oslo, 8 April 2019. * * * Accompanying slides of the speech. Your excellencies, ladies and gentlemen. Firsts of all, I would like to thank you for taking the time to attend this event, which provides me with an opportunity to present Norges Bank’s view of the economic situation and some of the challenges ahead. International economic cooperation is creaking Throughout history, technological innovation and increased trade in goods and services have been important sources of growth and development. The two driving forces have functioned in tandem. Trade barriers have been reduced in recent decades. Faster transport and advanced communications systems have greatly facilitated access to broader markets. Global value chains have emerged, and service providers can be located far from customers. With freeflowing capital, we can invest globally. Chart: World trade has grown markedly Since the 1970s, world trade has grown rapidly. As a percentage of world GDP, international trade has almost doubled. A number of new countries have also increased their share in world trade. A more closely integrated world economy has facilitated specialisation, innovation and better use of local resources. The room for exchanging ideas and knowledge has expanded. Increased competition and innovation have gone hand in hand. Chart: Trade gives Norway opportunities Efficient global trade is particularly advantageous for small open economies, like Norway. Norway has benefitted greatly from the opportunities afforded by trade with other countries.