Norway: Economic output rebounds robustly in February
Economic output expanded 0.6% over the prior month in February, accounting for seasonality, contrasting the 0.5% contraction in January. The economy grew 1.1% in the rolling quarter of December–February relative to the previous quarter, which was down from the 1.6% expansion in November–January.
Mainland GDP, excluding hydrocarbon extraction and related transport, grew 0.3% in February over the previous month, after increasing 0.2% in January. In the rolling quarter of December–February, the economy grew 0.1% from the previous rolling quarter, unchanged from November–January.
In February, a strong rebound in exports supported economic activity as crude oil and natural gas exports increased 5.4% month-on-month after falling 12.6% in January. On the domestic front, private consumption accelerated, while the decline in fixed investment softened. In contrast, government consumption was flat in February, down from a 0.7% increase in January.
The economy will likely suffer in the coming months, as containment measures due to Covid-19, an expected steep rise in unemployment, and weak krone will all bite into private consumption. Moreover, depressed oil and gas prices are expected to drag on investment in the energy sector this year. Nevertheless, stronger fiscal and monetary stimulus should cushion the blow somewhat and support a quick recovery once the pandemic subsides.