Norway skyline at night

Norway Economic Forecast

Norway Economic Outlook

The economy likely contracted marginally in Q1 2023. In the rolling quarter December–February, GDP tallied a 0.2% quarter-on-quarter expansion. However, Q1’s outturn will be highly dependent on the economy’s performance in March: GDP was flat in January month on month and posted a marginal 0.1% contraction in February, with a decline in exports of goods and services and investment weighing on the GDP reading. In Q1, business sentiment improved but remained pessimistic, while consumer sentiment remained entrenched in pessimistic territory. This likely resulted from price pressures remaining as elevated in Q1 as in Q4 and a further increase in borrowing costs in March. More positively, consumer spending rebounded in February, likely preventing a larger GDP decline. Meanwhile, the manufacturing PMI showed conditions continued to deteriorate in March but at a softer pace than in February.

Norway Inflation

Inflation ticked up further above Norges Bank’s 2.0% target to 6.5% in March, from February’s 6.3%, on stronger price increases for housing and utilities. Similarly, core inflation rose to 6.2%. Our panel expects inflation to cool this year, but, on average, it will still be more than double the target. A weaker-than-expected krone is an upside risk.

This chart displays Economic Growth (GDP, annual variation in %) for Norway from 2013 to 2022.

Norway Economic Data

2017 2018 2019 2020 2021
Population (million) 5.3 5.3 5.3 5.4 5.4
GDP (USD bn) 402 439 409 368 490
GDP per capita (USD) 76,214 82,755 76,505 68,431 90,676
GDP (EUR bn) 356 372 365 323 414
GDP per capita (EUR) 67,592 70,140 68,350 60,027 76,707
GDP (NOK bn) 3,323 3,577 3,597 3,462 4,212
Economic Growth (Nominal GDP, ann. var. %) 6.6 7.6 0.6 -3.8 21.7
Economic Growth (GDP, ann. var. %) 2.5 0.8 1.1 -1.3 3.9
Economic Growth (Mainland GDP, ann. var. %) 2.2 1.9 2.3 -2.8 4.2
Domestic Demand (ann. var. %) 2.5 2.0 2.0 -3.8 2.6
Private Consumption (ann. var. %) 2.2 1.4 1.0 -6.2 4.4
Government Consumption (ann. var. %) 1.9 0.6 1.1 -0.5 5.0
Fixed Investment (ann. var. %) 2.6 2.2 9.5 -4.1 -0.8
Exports (G&S, ann. var. %) 1.6 -1.5 2.1 -2.3 5.8
Imports (G&S, ann. var. %) 1.8 1.4 5.3 -9.9 1.7
Industrial Production (ann. var. %) 2.3 1.1 -5.0 4.1 3.3
Wages (ann. var. %) 2.2 2.7 3.6 3.2 3.3
Unemployment (% of active population, aop) 4.2 3.9 3.7 4.6 4.4
Fiscal Balance (% of GDP) 5.0 7.8 6.5 -2.6 10.6
Public Debt (% of GDP) 37.5 38.9 39.9 45.2 42.5
Money (ann. var. of M2 %) 6.0 5.3 4.2 12.1 10.4
Inflation (CPI, ann. var. %, eop) 1.6 3.5 1.4 1.4 5.3
Inflation (CPI, ann. var. %, aop) 1.9 2.8 2.2 1.3 3.5
Inflation (HICP, ann. var. %, aop) 1.9 3.0 2.3 1.2 3.9
Inflation (Core, ann. var. %, aop) 1.4 1.5 2.2 3.0 1.7
Inflation (PPI, ann. var. %, aop) 9.3 14.8 -3.6 -10.2 37.8
Sight Deposit Rate (%, eop) 0.50 0.75 1.50 0.00 0.50
3-Month NIBOR (%, eop) 0.81 1.27 1.84 0.49 0.95
10-Year Bond Yield (%, eop) 1.65 1.79 1.55 0.96 1.71
Stock Market (ann. var. of OSEBX %) 19.4 -2.0 16.4 4.2 23.3
Exchange Rate (NOK per USD, eop) 8.18 8.66 8.79 8.56 8.82
Exchange Rate (NOK per USD, aop) 8.3 8.1 8.8 9.4 8.6
Exchange Rate (NOK per EUR, eop) 9.8 9.9 9.9 10.5 10.0
Exchange Rate (NOK per EUR, aop) 9.3 9.6 9.9 10.7 10.2
Current Account Balance (EUR bn) 22.5 33.3 13.8 3.6 56.5
Current Account Balance (% of GDP) 6.3 9.0 3.8 1.1 13.6
Merchandise Trade Balance (EUR bn) 19 30 16 1 64
Foreign Direct Investment (EUR bn) -5.2 0.2 14.9 -1.2 -1.4

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