2016, housing starts came to almost 37 000, the highest number recorded since the early 1980s. in the present situation, it has been sensible to pursue a potent countercyclical policy. many countries have experienced that a sharp fall in output and employment can have long - lasting adverse effects. it must be recognised, however, that the longer - term challenges facing the norwegian economy cannot be resolved by spending more oil revenues and keeping the interest rate low. chart : norway ’ s trade and current account balance as a small open economy, much of our welfare is based on trade with other countries, providing us with access to goods and services others are better able to produce. but we also have to offer something in return. high oil and gas prices have over the years generated large current account surpluses. these surpluses have declined in the past few years. oil and gas production passed its peak more than a decade ago. we may find once again that these resources have been underestimated. but the oil price collapse and developments in the norwegian economy in the past few years have reminded us of an inescapable fact ; we must drive forward a larger non - oil tradable sector. we need more legs to stand on. the needed structural adjustments in the norwegian economy will have to be dealt with against the backdrop of more global challenges. demographic changes and sagging productivity growth may point towards persistently low growth in advanced economies. protectionist tendencies and reduced trade in goods and services could put an additional drag on growth. we must also make changes to consumption and production methods in order to reduce greenhouse gas emissions. this evening i will take a closer look at these challenges. is low growth here to stay in advanced economies? in the long term, there are two factors that determine how quickly an economy can grow : the 2 / 9 bis central bankers'speeches supply of labour and labour productivity. chart : working age population the decline in the working age population is weighing on the growth outlook for many countries. the large post - war cohorts are leaving the labour force, and the consequences of a long period of low fertility rates are becoming increasingly clear. at the same time, the proportion of the population who are employed remains low in many countries. high unemployment and low labour force participation among women may make room for further growth in employment even if the population stops growing. the demographic situation in norway is more favourable, but the labour force in norway is also likely to grow at a slower pace. labour immigration

. on the other hand, the improvement in economic activities has not stimulated corporate demand for external funds, since firms ’ cash flow is at a high level in parallel with recovery in profits. moreover, firms continue to reduce their debts as part of their balance - sheet restructuring measures. as a result, credit demand in the private sector has continued to be basically stagnant. in view of this, the underlying tone of private banks ’ lending remains sluggish. recently, however, the expansion in the year - to - year decline seems to be ceasing. issuance of corporate bonds and cps has been steady. money stock ( m2 + cds ) grew slower in august compared with the previous month on a year - on - year basis. recently, funding costs for firms are increasing, albeit gradually, due to the rise in money market rates after the termination of the zero interest rate policy. in this financial environment, there seem to be no substantial changes in the lending attitude of financial institutions and easing of corporate financing conditions. “ the bank of japan will encourage the uncollateralized overnight call rate to move on average around 0. 25 %. ”