Norway GDP

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Norway: Economic growth improves markedly in Q2

August 21, 2014

In Q2, total GDP increased a seasonally-adjusted 0.9% over the previous quarter, which was well above the 0.2% expansion tallied in Q1. The reading was greater than the 0.5% the markets had expected. According to the statistical office, total GDP benefited from an improvement in both the final domestic use of goods and services and petroleum activities and ocean transport. On an annual basis, total GDP contracted 0.3% in the second quarter, which contrasted the 3.9% expansion registered in the first quarter and marked the first contraction since Q1 2013.

Mainland GDP—consisting of all domestic production activity except for the extraction of crude oil and natural gas (including related services), pipeline and ocean transport—jumped a seasonally-adjusted 1.2% in Q2. The reading was more than double the 0.5% increase observed in Q1 and marked the fastest pace since Q1 2012. The expansion exceeded the 0.6% rise the market had expected. Compared to the same period last year, the mainland economy decelerated from 3.6% expansion in Q1 to a mere 0.8% increase in Q2.

Private consumption increased 0.8% in Q2, which virtually matched the 0.9% expansion observed in the previous quarter. In the same line, government spending expanded 0.6% in Q2, which maintained virtually the same pace as in Q1 (+0.7% quarter-on-quarter). Meanwhile, gross fixed investment swung from a 3.1% decrease in Q1 to a 1.4% expansion in Q2.

The external sector deteriorated as exports of goods and services fell 0.6% over the previous quarter, which contrasted the 0.4% expansion tallied in Q1. Conversely, imports grew 0.9% in Q2, which contrasted the 2.6% decrease tallied in Q1. Consequently, the contribution from net exports to overall economic growth swung from plus 0.9 percentage points in Q1 to minus 0.5 percentage points in Q2.

The Central Bank expects total GDP to rise 1.5% in 2014 and 2.0% in 2015. FocusEconomics Consensus Forecast panelists see total GDP increasing 1.8% in 2014, which is down 0.1 percentage points from last month’s estimate. For 2015, the panel expects the economy to expand 2.1%. Meanwhile, the Bank sees Mainland GDP expanding 1.8% in 2014 and 2.5% in 2015. FocusEconomics Consensus Forecast panelists expect Mainland GDP to increase 2.1% in 2014, which is up 0.1 percentage points from last month’s projection. In 2015, panelists see Mainland GDP growth rising to 2.3%.


Author: Ricard Torné, Head of Economic Research

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Norway GDP Q2 2014

Note: Quarter-on-quarter changes of seasonally adjusted GDP and year-on-year variation in %.
Source: Statistics Norway (SN) and FocusEconomics Consensus Forecast.


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