The level of investment is assumed to increase somewhat in 2006 and remain high next year, before declining slightly the following year when Ormen Lange and Snøhvit are scheduled for completion. Continued high oil prices are expected to contribute to high investment both in exploration and in fields in operation in the years ahead. Information from our regional network suggests that petroleum investment is providing considerable impulses to activity in Norway’s coastal regions. According to the network, suppliers to the petroleum industry are expecting continued strong growth over the next few months. Statistic Norway’s investment intensions survey for oil and gas activities confirms the impression of positive expectations for 2006 and 2007. There are prospects for strong growth in the Government Pension Fund - Global. Given our assumption for oil price developments ahead (oil futures), spending in line with the expected real return on the Fund implies that the structural, non-oil deficit may increase by close to NOK 15 billion at 2006 prices in both 2008 and 2009. With a period of strong expansion in the Norwegian economy, somewhat lower petroleum revenue spending will be in line with the fiscal rule. Our projections are based on the assumption that fiscal policy will generate some stimulus to total demand and output in 2008 and 2009, but somewhat less than the expected return on the Fund would imply. Economic growth in Sweden, the UK and the euro area is high. Economic developments in China and India remain strong. GDP growth in the US and Japan has slowed.

4/16  The economic literature fairly unanimously considers that trade openness in the world economy in recent decades has been fundamental for global growth and social well-being.2 Against this background, the proliferation of protectionist measures is one of the greatest threats to the world economy. Along with their direct repercussions on global activity, such measures generate additional adverse effects through their impact on global confidence. And these effects are so far proving significant. Accordingly, any future proliferation of additional protectionist actions, further undermining confidence and affecting financial conditions (and, therefore, business investment), might ultimately impact global GDP severely.3 Turning to Brexit, it is over three years since the UK referendum on EU withdrawal. Doubts persist over how the exit process will be resolved, and Brexit remains a primary source of uncertainty for global economic activity and, especially, for the rest of the EU. After the latest developments, including the new prime minister’s decision to suspend parliament until midOctober, the markets now consider a hard Brexit to be more likely. On the simulations available, a Brexit with a trade agreement would have a relatively limited effect. But the adverse consequences of a no-deal Brexit would be significant, especially for the UK economy.4 Against this background of uncertainty, UK GDP has already posted negative growth in the second quarter of this year. The economic situation in the euro area: economic slowdown and low inflation The more open European and East Asian economies have been those most affected by these international trade developments.