Norway GDP


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.

The Central Bank expects total GDP to rise 1.25% in 2015 and 1.5% in 2016. FocusEconomics Consensus Forecast panelists see total GDP increasing 1.4% in 2015, which is down 0.2 percentage points from last month’s estimate. For 2016, the panel expects the economy to expand 1.9%. Meanwhile, the Bank sees mainland GDP expanding 1.5% in 2015 and 2.0% in 2016. FocusEconomics Consensus Forecast panelists expect mainland GDP to increase 1.7% in 2015, which is down 0.2 percentage points from last month’s projection. In 2016, panelists see mainland GDP growth at 2.0%.

Author:, Economist

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Norway GDP Chart

Norway GDP Q1 2015

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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