Norway: Economic growth picks up pace in Q3
November 18, 2022
The Norwegian economy gained steam in the third quarter of 2022; GDP growth accelerated to 1.5% in seasonally adjusted quarter-on-quarter terms. The increase came in above the prior quarter’s 1.3% rise and was largely due to improved service industry and wholesale trade activity. Conversely, the mainland economy—which excludes petroleum activities and related ocean transport—grew 0.8% on a seasonally adjusted quarter-on-quarter basis in Q3; while it was a softer expansion than the previous period’s 1.2%, it beat market expectations.
Domestically, the improvement was spearheaded by fixed investment, which doubled its growth (Q3: +0.4% s.a. qoq; Q2: +0.2% s.a. qoq). Conversely, private consumption grew a modest seasonally adjusted quarter-on-quarter 0.5% in Q3, coming in below Q2’s 3.7% increase. The improvement in the labor market (unemployment rate Q3: 3.2%; Q2: 3.3%), coupled with 0.2% wage growth, could not shield consumers from elevated inflation, which eroded their purchasing power. Lastly, government spending swung to a marginal 0.1% quarterly contraction (Q2: +0.1% s.a. qoq).
On the external front, exports of goods and services expanded 5.7% on a seasonally adjusted quarter-on-quarter basis in Q3, more than doubling the 2.8% increase posted in Q2. Conversely, imports of goods and services growth eased to 2.9% (Q2: +5.7% s.a. qoq). Consequently, the external sector contributed 0.8 percentage points to overall growth, improving from the prior quarter’s 1.0 percentage point detraction.
On an annual basis, total economic activity growth softened in Q3, coming in at 2.5%, below Q2’s 4.4% increase. Similarly, mainland economic growth softened to 2.9% year on year in Q3, from the previous quarter’s 4.9% rise.
Author: Marta Casanovas, Economist