Norway Economic Forecast

Norway Economic Outlook

October 27, 2020

The economy likely recovered in Q3, following the sharp contraction recorded in Q2. GDP grew mildly in August, slowing from July’s level as household spending lost steam—evidenced by a slowdown in retail sales during the month—and coming amid decelerating industrial production growth. More positively, merchandise exports in September shrank at the softest rate since February as oil production picked up from April’s nadir. Additionally, merchandise imports expanded for the fourth consecutive month, signaling improving domestic demand. Meanwhile, the government announced its draft budget for 2021, totaling NOK 315 billion—around USD 35 billion and nearly 10% of Mainland GDP—and continuing the expansionary stance of the previous year’s plan. Details include a growth-promoting cut to working capital and measures to continue mitigating the pandemic’s impact on the labor market.

Norway Economic Growth

The economy is set for a healthy rebound in 2021, following this year’s pandemic-induced contraction. Surging private consumption and an uptick in capital spending will likely support domestic demand, while a recuperated external picture should benefit key exports. However, the persistent nature of the pandemic and uncertain future demand for oil are key risks ahead. FocusEconomics Consensus Forecast panelists estimate total GDP growing 3.3% in 2021, which is down 0.1 percentage points from last month’s forecast, and expand 2.5% in 2022. Furthermore, our panelists see mainland GDP increasing 3.7% in 2021, which is down 0.1 percentage points from last month’s projection, and growing 2.2% in 2022.

Norway Economy Data

2015 2016 2017 2018 2019
Population (million)5.25.35.35.35.4
GDP per capita (USD)75,97370,49574,36781,36977,724
GDP (USD bn)395370393433416
Economic Growth (GDP, annual variation in %)2.01.12.31.31.2
Domestic Demand (annual variation in %)1.01.62.22.12.4
Consumption (annual variation in %)2.71.12.21.91.5
Investment (annual variation in %)-4.03.92.62.86.1
Exports (G&S, annual variation in %)4.31.11.7-0.21.5
Imports (G&S, annual variation in %)1.92.71.91.95.2
Industrial Production (annual variation in %)0.6-1.52.11.2-4.9
Retail Sales (annual variation in %)0.6-0.92.10.90.1
Unemployment Rate4.54.74.23.83.7
Fiscal Balance (% of GDP)6.04.15.07.86.4
Public Debt (% of GDP)33.437.237.839.440.6
Money (annual variation in %)0.65.16.05.34.1
Inflation Rate (CPI, annual variation in %, eop)2.33.51.63.51.4
Inflation Rate (CPI, annual variation in %)2.23.61.92.82.2
Inflation (PPI, annual variation in %)-8.1-8.09.314.8-3.6
Policy Interest Rate (%)0.750.500.500.751.50
Stock Market (annual variation in %)5.912.119.1-1.816.5
Exchange Rate (vs EUR)9.609.099.859.919.84
Exchange Rate (vs EUR, aop)8.959.299.339.619.85
Current Account (% of GDP)7.74.05.77.24.0
Current Account Balance (USD bn)30.514.822.531.016.5
Trade Balance (USD billion)27.514.421.535.617.8

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Norway Facts

Value Change Date
Bond Yield1.58-0.65 %Jan 01
Exchange Rate8.78-0.38 %Jan 01

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