Norway has seen several years of strong economic growth and very low unemployment. Low imported inflation has allowed Norwegians to enjoy large real wage gains with only modest increases in inflation until recently. A number of OECD countries have seen long booms brought to an end by an abrupt about-turn in housing and financial markets, while others have seen tentative upswings fade, with inflation rising under the influence of energy and commodity prices. Norway’s upswing may be slowing but shows no sign of coming to an abrupt end. Pressures that act as negative supply shocks in some countries have beneficial effects for Norway. The rise in the prices of oil and some metals, and low or falling prices for many imports, have brought considerable terms of trade gains to Norway over the past few years. Increased income from oil and gas production both benefits public finances and stimulates demand in the oil-supporting sectors of the mainland economy, contributing to the excellent growth and productivity performance that mainland Norway has been showing. However, Norway is not untouched by the ongoing slowdown in the OECD, while domestically generated inflation has also begun to pick up. Macroeconomic policy is now facing a number of difficult challenges.