* Nordic economies buoyant compared with euro zone-OECD
* Sweden, Finland should stimulate growth if needed
* Swedish central bank should stand ready cut rates
PARIS, Nov 27 Sweden's central bank and
government should stimulate the economy if a pick-up in growth
next year falters, while Denmark and Finland face similar
challenges, the OECD said on Tuesday.
In its annual outlook, the Organisation for Economic
Cooperation and Development (OECD) said growth in oil-rich
Norway will remain healthy and policymakers there should keep
inflation in check and monitor rising levels of household debt.
The OECD forecast the biggest Nordic economy Sweden would
see growth ease to 1.2 percent this year from 3.9 percent in
2011, before rising to 1.9 percent in 2013.
"Risks are tilted to the downside," the OECD said, citing
lower consumption and possible bank problems if house prices
fell sharply, or lower external demand if the euro zone did not
solve its problems.
Given subdued inflation, the OECD said the Swedish central
bank should cut its benchmark rate further from the current 1.25
percent level and that the centre-right government should be
prepared to add a fiscal stimulus if needed.
The OECD saw Danish growth coming in at 0.2 percent this
year before rising to 1.4 percent in 2013, but this forecast
also risked falling short if the euro area crisis worsened or
the were smaller than expected gains in competitiveness.
It said Danish monetary policy was accommodative and that
fiscal policy would be slightly tighter in 2013, but neutral in
2014, which the OECD was appropriate.
Growth in euro zone member Finland would be 0.7 percent this
year and 1.1 percent in 2013, the OECD said. Exposed to the
currency bloc's problems, the country would suffer if external
demand remained weak.
"In the event of significantly lower than forecast growth,
the fiscal space for discretionary action should be used," the
OECD added. Finland also had to take measures to deal with one
of the most rapidly ageing populations in Europe, it said.
Oil exporter Norway was set for gross domestic product (GDP)
to expand 3.3 percent this year and 2.5 percent in 2013.
The OECD said it assumed the central bank would raise its
policy interest rate as inflation gained pace.
Given an acceleration in house price growth, the OECD said
the authorities had to keep a close eye on the vulnerability of
households to credit shocks.
Smallest Nordic economy Iceland was seen growing 2.5 percent
this year and 2.7 percent in 2013 as it continues to bounce back
from the collapse of its banks in 2008. Baltic state Estonia,
which joined the OECD in 2010, was expected to expand 3.1
percent this year and 3.7 percent in 2013, the OECD added.