Norway: Economic growth softens markedly in the fourth quarter
The economy lost momentum in the final quarter of 2021, with GDP expanding 0.1% on a seasonally-adjusted quarter-on-quarter basis, slowing from the prior quarter’s 3.9% increase.
Domestically, the fourth quarter’s moderation was due to private consumption growth softening to a seasonally-adjusted quarter-on-quarter 3.2% from the previous quarter’s 6.0%. That said, the decline in the unemployment rate (Q4: 3.4%; Q3: 4.2%), likely sustained private spending and prevented a sharper moderation. Moreover, government spending growth also cooled, coming in at 0.1% in Q4 (Q3: +2.0% s.a. qoq), a decline which more than offset fixed investment’s return to growth, which expanded 4.2% in Q4, contrasting Q3’s 0.9% decline.
On the external front, exports of goods and services declined 2.6% on a seasonally-adjusted quarter-on-quarter basis in Q4, swinging from the 6.5% expansion logged in Q3. Meanwhile, imports of goods and services increased at a softer rate of 1.1% in Q4 (Q3: +5.4% s.a. qoq). Consequently, the external sector detracted 1.3 percentage points from the overall reading in Q4, contrasting the prior quarter’s 0.7 percentage-point contribution.
The mainland economy—which excludes petroleum activities and related ocean transport—expanded 1.4% on a seasonally-adjusted quarterly basis in Q4, easing from the 2.8% increase recorded in the previous quarter. Meanwhile, on an annual basis, total economic activity growth quickened to 5.4% in Q4, accelerating marginally from Q3’s 5.3% expansion. Lastly, mainland economy growth also picked up, coming in at 5.3% year-on-year in Q4 from 5.1% in the previous quarter.
As such, the total economy expanded 3.9% in annual terms in 2021 as a whole, strongly rebounding from the 0.7% contraction recorded in 2020. Meanwhile, the mainland economy grew an annual 4.2% in 2021 (2020: -2.3% yoy).