Norway GDP Q2 2017


Norway: Economy firmly in recovery as Q2 GDP growth beats expectations

August 23, 2017

In Q2, the total economy expanded a seasonally-adjusted 1.1% from a quarter earlier, accelerating markedly from the tepid 0.2% growth recorded in Q1. The bright print, which beat market expectations of a more timid 0.6% expansion, was largely the result of a rebound in the country’s offshore oil and gas sector, which had contracted sharply in Q1. Meanwhile, mainland GDP, which excludes petroleum activities and related ocean transport, was stable at 0.7% in Q2 from a quarter earlier, following an upward revision to Q1’s result (previously reported: +0.6% quarter-on-quarter)—a back-to-back tie for the strongest print in three years.

In annual terms, however, the health of the economy appeared less certain. In Q2, total GDP growth fell to 0.2% from a year earlier (Q1: +2.5% year-on-year; previously reported, Q1: +2.6% yoy), while mainland GDP growth contracted 0.2% (Q1: +2.5% yoy; previously reported, Q1: +3.1% yoy).

Domestic demand was broadly in line with the moderately improved overall picture. Fixed investment, however, stood, outgrowing 3.2% from a quarter earlier (Q1: -0.6% qoq) following two quarters of contraction—a nearly five-year high that underscored the sharp climb in business confidence since the outset of the year. Meanwhile, private consumption rose 1.0% (Q1: +0.6% qoq), in line with falling unemployment, while government consumption decelerated to 0.4% (Q1: +0.8% qoq).

Encouragingly, the external sector experienced a turnaround in Q2. Exports grew 1.0% (Q1: -0.9% qoq) following a revised contraction in Q1 (previously reported: +0.9% qoq), largely due to higher shipments of refined products. Moreover, exports of traditional goods—which exclude crude oil, natural gas, natural gas condensates, ships and oil platforms—again grew robustly despite decelerating from a quarter earlier (Q2: +3.0% qoq; Q1: +6.0% qoq). Imports, on the other hand, contracted 0.4% (Q1: +4.3% qoq); imports of traditional goods fell even more sharply.

Notwithstanding stable mainland growth through H1, it appears that the overall economy is finally firmly in recovery. Domestically, the economy is expected to continue benefiting from improved business confidence and low inflation. Meanwhile, exports should continue ramping up as global demand intensifies in the medium term. With that, the Central Bank expects total GDP to increase 1.5% in 2017 and 1.1% in 2018. FocusEconomics Consensus Forecast panelists see total GDP increasing 1.6% in 2017, which is up 0.1 percentage points from last month’s forecast. For 2018, the panel expects the economy to expand 1.8%. Meanwhile, the Central Bank expects mainland GDP to grow 2.0% in both 2017 and 2018. Our panelists expect mainland GDP to increase 1.8% in 2017, which is unchanged from last month’s projection. In 2018, panelists see mainland GDP growth at 2.2%.


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Norway GDP Chart

Norway GDP Q2  2017

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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