Norway: A robust mainland economy underpins growth in Q2
August 23, 2018
In the second quarter of 2018 the economy grew a seasonally-adjusted 0.4% from the previous quarter, up from the revised 0.2% expansion in the first quarter (previously reported: 0.6% quarter-on-quarter). The mainland economy, which excludes petroleum activities and related ocean transport, expanded 0.5% in Q2, up from Q1’s revised 0.4% increase (previously reported: +0.7% qoq). The print matched market analysts’ expectations.
In year-on-year terms, the economy expanded notably in the second quarter. Output increased a significant 3.3% in Q2, following the first quarter’s revised contraction of 0.7% (previously reported: +0.3% year-on-year). Meanwhile, growth in the mainland economy surged to 4.6%, a notable contrast from Q1’s revised 0.3% decrease (previously reported: +0.9% yoy).
Amid high consumer confidence and falling unemployment, private consumption leapt to 1.1% in the second quarter compared to the first quarter in seasonally-adjusted terms. This was a better result than in Q1, when growth only notched 0.1%. Government consumption increased 0.4% in Q2, up from the flat result in Q1. Fixed investment meanwhile shot up to 5.4% in Q2, strongly contrasting the 6.4% contraction in Q1. This improved investment result was experienced across the economy—underpinned by higher investment in the petroleum, services and general government sectors—and came amid increased business confidence.
While exports increased 1.5% in Q2 from the previous quarter in seasonally-adjusted terms, up from 0.6% in Q1, import growth rocketed to 4.3%, contrasting the 2.0% fall recorded in Q1. The strong imports reading in Q2 was driven by a substantial increase in purchases of ships, oil platforms and aircraft. Consequently, the external sector deducted 0.9 percentage points from overall economic growth in Q2, contrasting its 0.9% contribution in Q1.
Norway GDP Forecast
The Central Bank expects total GDP to increase 2.0% in 2018 and 1.6% in 2019. FocusEconomics Consensus Forecast panelists see total GDP expanding 2.1% in 2018, which is up 0.1 percentage points from last month’s forecast. For 2019, our panelists expect growth of 2.0%. In terms of mainland GDP, the Central Bank expects growth of 2.6% in 2018 and 2.3% in 2019. FocusEconomics Consensus Forecast panelists see mainland GDP increasing 2.4% in 2018, which is up 0.1 percentage points from last month’s projection, and 2.2% in 2019.
Author: Edward Gardner, Economist