Report calls for tighter economic controls

There should be no deficits in central and local administration budgets when the economy is as strong as it is now.

To ensure a sustainable fiscal policy, an economic regulatory framework is needed to keep the government’s expenditure growth in check.

These are the main points of the economic council’s autumn report, presented in Tórshavn yesterday.

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An economic regulatory framework should be implemented immediately and should be updated regularly as the challenges of an ageing demographic become a reality.

Such a framework could ensure that expenditure growth does not exceed 2-3 percent per year while government investments are kept steady.

Continuing with the current fiscal policy might leave future generations hobbled by debt, concludes the report.

High GDP growth

The Faroese GDP growth at market prices is estimated at 11.2 percent this year and 2.6 percent next year.

Although Faroese consumers are perfectly aware of the rising prices and the possibility of higher interest rates, household consumption patterns appear relatively unchanged, according to the autumn report.

However, retailers are feeling the effects of reopened borders as consumers are starting to spend more money abroad.

Read the autumn report here (in Faroese only). 

Read the Faroese version of this article here.

More Faroese News in English.