Future increases in ageing in Norway will require “fiscal adjustment”, according to the International Monetary Fund (IMF).

In a Staff Concluding Statement of the 2022 Article IV Mission, the IMF noted that challenges ahead relate to “adverse demographic trends” and the transition away from oil, which may put “serious strain” on public finances.

“Over the past decade, growth in transfers from the Government Pension Fund Global (GPFG) and tax revenues has exceeded growth in pension and ageing-related spending, creating policy space to finance additional initiatives to promote long-term growth.

“However, with GPFG transfers projected to decline over the coming decades, the ability to finance the current high level of spending will be challenged,” the IMF reported.

Therefore, it said that future increases in ageing and healthcare spending will require some “fiscal adjustment” in the longer term. It suggested that reforms that increase labour supply (including changes to sickness and disability benefit schemes) will boost growth prospects, but more is needed to improve long-term fiscal sustainability.

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