Norway Makes Europe’s Lowest Unemployment Rate Economic Goal

Norway’s Prime Minister Jens Stoltenberg committed to making Europe’s lowest unemployment rate an economic goal as the debt crisis further south shows signs of hurting exporters.

Stoltenberg’s Labour Party will do what it can to ensure Norway “remains the country in Europe with the lowest unemployment rate,” he told reporters in Oslo today.

Western Europe’s largest oil producer has largely avoided the fallout from Europe’s debt crisis, thanks to record investment in its oil and gas fields. Still, growth in exports will slow to 0.5 percent this year from 2.9 percent in 2012, the central bank estimates. Weaker growth prospects are feeding through to the labor market, pushing unemployment to the highest level since 2011.

The registered joblessness rate was 2.7 percent in March, according to Statistics Norway. Euro-area unemployment rose to a record 12 percent in February. Norway, like Switzerland, isn’t a member of the European Union.

The nation’s central bank signaled on March 14 it’s ready to cut interest rates further to stem krone gains that have hurt exporters and kept inflation below target. Governor Oeystein Olsen said this month that conducting monetary policy is “challenging” as he tries to prevent the krone appreciation without fanning record household debt growth.

Krone Strength

The krone reached a record in February, on a trade-weighted basis, and has surged about 22 percent against the euro since early 2009. Its strength has kept inflation below the bank’s 2.5 percent target since 2009.

Stoltenberg, who trails in most opinion polls ahead of an election in September, also today said it’s important to keep spending in check and stick to the country’s 4 percent fiscal rule. The guideline limits spending of oil revenue to plug deficits to 4 percent of the nation’s $720 billion wealth fund.

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