Norway: Economic growth slows in July
September 8, 2020
Economic output grew 1.1% over the prior month in July in seasonally-adjusted terms, slowing from the 3.1% expansion in June but marking the third consecutive month of growth. Nevertheless, the economy shrank 0.3% in the rolling quarter of May–July relative to the previous quarter (February–April), albeit markedly softer than the 5.2% contraction in April–June.
Mainland GDP—which excludes hydrocarbon extraction and related transport—also rose 1.1% in July over the previous month, after growing 3.7% in June. In the rolling quarter of May–July, the mainland economy shrank 0.4% from the previous rolling quarter, notably worse than the 6.4% contraction recorded in April–June.
The slowdown in output in July was spearhead by slower private consumption growth, which rose 2.9% month-on-month (mom) after expanding 6.7% in June. Moreover, government spending slowed to 1.0% in July, down from 1.3% in the prior month. However, fixed investment rose 2.2% in the month (June: -1.0% mom), softening the overall slowdown somewhat. Externally, exports jumped 5.6% in July, accelerating from the 2.0% rise in June, while imports also increased 4.4% in July, softening from June’s 7.7% rise.
July’s reading came amid the continued easing of containment measures, although July being a holiday month—thus affecting activity in some industries—and the prolonged nature of the viral outbreak both weighed on overall growth. Furthermore, low oil and gas prices are an impediment to energy-sector investment this year, with uncertainty in future demand for fossil fuels further clouding the outlook.
Author: Stephen Vogado, Economist