. unemployment has risen slightly again in eastern norway. this reflects lower employment in private services that may be a result of a slight downturn in the ict industries and retail trade. the government ’ s long - term programme for 2002 - 2005, which was approved by the storting in june 2001, states : " considerable emphasis must be placed on stabilising fluctuations in the economy in order to ensure appropriate capacity utilisation and low unemployment. petroleum revenues will gradually be phased into the economy, approximately in step with the expected real return of the petroleum fund. " fiscal policy will contribute to stimulating activity in the economy because of the increase in spending of oil revenues. the new guidelines imply that the non - oil deficit will increase in the years ahead. this will provide a substantial fiscal stimulus every year. summary the tragic events in the us on 11 september will contribute to a further dampening of activity in the american, asian and european economies. it is too early to predict the long - term effects. reactions in financial markets have been pronounced. share prices have fallen sharply. the u. s. dollar has depreciated. currencies of other economies such as sweden have depreciated. central banks have ensured the smooth functioning of markets by supplying liquidity to the banking system. interest rates have been cut in the us, canada, the euro area, switzerland, sweden, hong kong, taiwan, denmark, japan, the uk, new zealand, korea and malaysia. these cuts will contribute to mitigating the negative effects on demand, output and employment. the norwegian economy is characterised by high capacity utilisation and strong cost inflation. the mainland economy appears to be expanding approximately in line with growth in output potential. at present, we do not have sufficient evidence to assert that international developments will change this situation. the announced increase in spending of petroleum revenues may lead to a more expansionary fiscal stance than in recent years. according to norges bank ’ s assessment, with an unchanged interest rate ahead, the probability that inflation two years ahead will be higher than 2½ per cent is the same as the probability that it will be lower.

has resulted in high energy consumption. so far this year, the price of brent blend oil has largely hovered around usd 45 per barrel, although the price rose to more than usd 50 per barrel at the beginning of march. oil futures prices have also increased. little idle production capacity in opec countries, combined with the prospect of lower production in non - opec countries, has probably influenced oil prices. at the same time, there are prospects of continued strong demand growth in important oil - importing countries, such as china and some other emerging economies. on the other hand, us crude oil stocks are now far larger than they were at the same time last year and the previous year. petrol stocks are also relatively high. this reduces the risk that low stocks and high petrol demand will push up the price of crude oil, as was the case last summer. planned, large - scale projects resulted in strong growth in petroleum investment in 2004. due to persistently high oil prices and expectations that oil prices will remain high, investment in the petroleum sector may reach record levels this year. the investment intentions survey for the petroleum sector points to very high growth. the level is expected to remain high throughout the projection period. activity in the petroleum sector will have spillover effects on the mainland economy, initially on the shipbuilding industry and the construction sector. the scale of petroleum investment and its spillover effects are highly uncertain. the last time petroleum investment showed a sharp increase, in 1997 / 1998, growth was substantially stronger than had been assumed. an upturn occurred in the norwegian economy as a whole at the same time. the unexpected increase in petroleum investment contributed to an economic upturn that was substantially stronger than projected. if oil prices rise further or remain at the current high level for a long period, petroleum investment may again amplify the cyclical upturn more than projected. inflation among our trading partners is expected to be low over the next few years. it is likely that high prices for oil and other commodities will continue to push up prices for goods where wages account for a small portion of total costs. on the other hand, growth among most of our main trading partners will probably be too low for idle resources to be utilised in the next few years. particularly in the euro area, wage growth is likely to be low as a result of moderate economic growth and high unemployment. overall, it would appear that international price impulses via consumer goods to the norwegian economy will remain negative this year and next. there is