The Norwegian economy has at least another couple of years of moderate growth, according to a press release issued by the country’s statistics authority (SSB).
SSB analysts predict that loss of powerful growth impulses from petroleum investments will be replaced by a moderate increase in growth in other demand. Unemployment, however, will continue to rise slightly, nearing 4% next year.
Growth in the Norwegian economy last year was considerably lower than in 2012. The economic recovery through 2011 and 2012 began to falter towards the end of 2012, and last year mainland GDP growth was somewhat lower than trend, according to the SSB.
At the same time, growth is showing signs of picking up in many other countries. Among Norway’s most important trading partners, this improvement is most pronounced in the United States, the United Kingdom and Sweden, whereas the Danish economy has barely grown for three years. Euro area GDP is now also growing, albeit cautiously, after a long recession, reports the SSB in its press release.
Because fiscal policy remains tight in much of the OECD area, the SSB analysts do not foresee a cyclical upturn for Norway’s trading partners collectively before 2015. Interest rates will therefore remain low in the near term.
Last year, weak growth in demand from abroad coincided with low or moderate growth in most domestic demand components. A notable exception was petroleum investment, which grew 18%. This investment was the essential reason that mainland economic growth was only slightly below trend, and that the increase in unemployment was not greater.
Compared to other countries, Norway has benefited from the fact that growth in general government demand was on a level with trend growth in the mainland economy.