NORWAY – Ratings agency Moody’s says Norwegian pension reform will be “essential” as the light of a rapidly ageing population.
Moody’s said in its annual report on Norway that “pension and labor market reforms will be essential as the rapidly ageing population exerts pressures on the government finances and limits economic growth potential”.
“Such reforms will become more urgent as oil and gas income recedes over time.”
It said that planned changes would assist in long-term welfare provision.
Moody’s said: “The rating agency anticipates that structural adjustments on pensions and taxes now in the pipeline will help to preserve the economy's competitiveness and provide for the long-term welfare of the population.”
Moody’s said the county’s Aaa ratings reflected “an extremely favorable financial situation as well as proactive economic policies”.
It said that Norway’s decision to segregate its oil and gas revenues into the Petroleum Fund for investment abroad was an example of responsible policymaking.
Last month the International Monetary Fund said in a report that the 803 billion-crown (99.4 billion-euro) Petroleum Fund “will not be enough” to cover future pension needs.
“Norway has the advantage of the Petroleum Fund, and the fact that future pension payments should be made clear by formally linking the fund to the pension system,” the IMF said.