Low oil prices led to a slowdown in activity in 2016, because of a reduction in oil investments and weaker private consumption. In 2017, growth is expected to be a little firmer, driven by private consumption and investment in non-oil sectors. However, the weak oil prices will still depress the oil and gas sector, which accounts for 20% of GDP, 30% of investments and 60% of total exports. Household consumption is, therefore, expected to support Norwegian growth, thanks to historically low interest rates (0.5%) set by the central bank, as well as rising property prices boosted by easy access to credit. The government's expansionary fiscal policy will also help to encourage public investment and household consumption (despite high rates of debt: 220% of gross disposable income). Moreover, unemployment will stabilize (4.5%), with a halt to oil sector companies' plans to lay off workers. The recovery of investment in the other sectors will also support the economy, especially in shipbuilding and construction. Past depreciation of the Norwegian krone (15% since 2014) benefited the tourism sector and improved the competitiveness of Norwegian exports, while, however, creating inflation (making imported goods more expensive). Inflation should, however, fall back below the central bank target (2.5%), with the stabilization of the krone. The two greatest risks are further falls in oil and house prices, which will adversely affect household consumption. Norway could, therefore, dig into the financial reserves of its sovereign fund, the biggest in the world in asset terms (about EUR 800 billion, or 2.2 times GDP) in order to maintain the level of economic activity.

The current account surplus will decline slightly in 2017 due to a contraction in the trade balance surplus. The drop in oil exports could be partially offset by higher exports in other sectors, which are expected to benefit from the depreciation of the Norwegian krone. Nonetheless, strong domestic demand will sustain imports, which will grow more strongly than exports. Imports from emerging countries (notably China) will represent an increasingly important share of Norway's trade transactions, although European countries will continue to be its main trading partners. Weak Euro zone demand combined with the consequences of Brexit could be risk factors for exports, 23% of which are sent to the United Kingdom. In its 2017 budget, similar to that of 2016, the government presented a series of measures aimed at stimulating activity and reducing the economy's dependence on natural resources. The main elements include a cut in corporation tax (from 27% to 22% by 2018) and income tax so as to increase the attractiveness of non-oil investment and support private consumption. This budget also includes finance for infrastructure projects and specific measures to stimulate employment and competitiveness, especially in the regions most affected by the weak oil prices. Despite a policy of higher spending and lower income, the budget surplus should still be considerable and at a very comfortable level relative to other OECD countries. Moreover, external shocks could be contained thanks to revenues from the Norwegian sovereign fund, 4% of which can be drawn on the budget. The public debt is also expected to edge up, while remaining very sustainable given the reserves the country has available.

The center-right government coalition, led by Erna Solberg, is expected to stay in place at least until the September 2017 parliamentary elections. However, disagreements are appearing within this coalition, exacerbated against a backdrop of sluggish growth. The Progress Party (FrP) is, for example, likely to advocate a less permissive immigration policy. Prime Minister Erna Soldberg is relying on a policy of fiscal stimulus to reinvigorate the economy ahead of the September 2017 parliamentary elections. Norway has risen two places in the World Bank's 2017 Doing Business rankings, so it is now sixth, the institution considers that the conditions for the performance of contracts have improved.