Faroese economy - Mounting pressures in the labour market

Analysis - November 2018 - No. 17

Authors Malthe-Thagaard, Sune
Subject Other economic analyses; Public finances and fiscal policy; Economic activity and employment
Type Analysis
Year 2018
Published 16 November 2018
The Faroese economy is booming, and labour market pressures are high. Fiscal policy should dampen demand in order to mitigate the risk of the economy overheating. Furthermore, the framework of local government finances should be tightened to ensure that the conditions are in place for fiscal policy to have a stabilising effect on the economy in future. The booming economy means that now is a good time to make public finances ready to tackle the higher expenditure associated with the ageing population in the coming decades.