Norway: Economic growth slows in Q1
May 21, 2015
In Q1, total GDP increased a seasonally-adjusted 0.2% over the previous quarter, which was a deceleration from the 0.9% expansion tallied in Q4. The reading overshot the 0.1% contraction that market analysts had expected. According to the statistical institute, Q1’s deceleration reflected a significant deterioration of the external sector, which offset much of the gains made by domestic demand and investment. Compared to the same quarter of the previous year, GDP slowed from a revised 3.0% growth in Q4 (previously reported: +3.2% year-on-year) to a 1.5% expansion in Q1.
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—rose a seasonally-adjusted 0.5% in Q1. The reading came in above the revised 0.4% increase observed in Q4 (previously reported: +0.5% quarter-on-quarter). Moreover, the expansion slightly exceeded the 0.2% rise the market had expected. Compared to the same period of the previous year, the mainland economy grew 1.3% in Q1 (Q4: +2.0% yoy).
Total investment saw a sharp rebound over the previous quarter (Q4: -6.9% qoq; Q1: 8.4% qoq), reaching the highest reading since December 2011. The increase was mainly driven by a strong increase in the stock of inventories. Conversely, private consumption and government spending moderated over the previous quarter, expanding 0.6% (Q4: +0.8% qoq) and 0.3% (Q4: +0.7% qoq), respectively.
The external sector deteriorated, as exports of goods and services contracted 3.8% over the previous quarter, which contrasted the 3.4% increase tallied in Q4. Imports, however, jumped 2.8% in Q1, which contrasted the 3.6% decrease tallied in Q4. Consequently, the contribution from net exports to overall economic growth swung from plus 2.4 percentage points in Q4 to minus 2.3 percentage points in Q1.
Author: Robert Hill, Economist