Output and employment figures are often revised and do not therefore always present an accurate picture of the current economic situation. Norges Bank therefore also uses a number of other indicators to gauge the temperature of the Norwegian economy. It appears that fiscal policy in 2004 will be somewhat more expansionary than assumed in the Revised National Budget. The Government estimates that underlying nominal spending growth over the central government budget will be close to 11 per cent between 2003 and 2005. Local government revenues are estimated to rise by slightly more than 11 per cent in nominal terms during the period. which is more than nominal growth in mainland GDP. Employment has picked up. The number of persons employed in the second quarter of 2004 was 0.2 per cent higher than in the same quarter of 2003. Employment growth has mainly occurred in retail trade, commercial services, education and health and social services. Manufacturing employment is still falling. Companies often wait to increase employment until the recovery has gained a firm footing. Compared with the recoveries in 1982 and 1991, employment growth in the current recovery has been weaker relative to output growth. The moderate increase in employment indicates that companies are still reaping the benefits of rationalisation measures. Household demand is one of the most important driving forces in the Norwegian economy. Low interest rates, high growth in real wages and rising housing wealth are stimulating private consumption.

The scale of spending required is significant; it raises questions on whether and how our financial system can deliver the required financing. Policy-makers recognise this; international fora such as the G20 and APEC have made long-term investment a priority agenda topic this year. A key challenge is how we can better channel capital flows towards infrastructure development, a major element in countries’ pursuit of sustainable, equitable growth. To address this challenge, we must pursue enhancements in three areas – first, to catalyse private sector involvement in project financing; second, to optimise the project delivery value chain; and third, to build capabilities in both the public and private sectors. Private sector investment in infrastructure is critical, and solutions must be created to support a necessary shift in sources of financing over time Let me first turn to private sector investment in infrastructure. At present, governments drive about 60% of infrastructure spending globally. But growing fiscal pressure means that public balance sheets will not be able to sustain the current or even higher level of spending that is needed. Bank lending has been the other main source of infrastructure financing, but this is increasingly constrained by macroeconomic factors and potentially regulatory developments. The global project finance bank loan market registered a 7% fall y-o-y in 2012. The Eurozone  BIS central bankers’ speeches  1  crisis saw many prominent project financing banks deleverage and become more selective with clients and transactions, while Basel III may lower the volume and raise the costs of project finance loans.