The Faroese economy – Boom and labour market pressure

Analysis – September 2017 – No. 17

Authors Malthe-Thagaard, Sune
Subject Nordic countries; Public finances and fiscal policy; Economic activity and employment; Faroese economy
Type Analysis
Year 2017
Published 25 September 2017
The Faroese economy is booming. Unemployment is low, and the construction sector, in particular, is reporting labour shortages. As in earlier boom periods, Faroese fiscal policy seems to be procyclical, with a resultant risk that the economy will overheat. The Faroese government should tighten the fiscal policy, and with the economy in good shape, now is a good time to address the long-term challenges of public finances.