The Faroese economy – Boom and labour market pressure
Analysis – September 2017 – No. 17
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.