Norway: Growth continues to moderate in fourth quarter amid lower crude shipments
February 15, 2012
In the fourth quarter, mainland Norway's GDP, which consists of all domestic production activity except extraction of crude oil and natural gas (including related services), pipeline and ocean transport, rose a seasonally adjusted 0.6% over the previous quarter. The print came in below the 0.8% expansion recorded in the third quarter (previously reported: +0.7% quarter-on-quarter) but slightly overshot the 0.5% increase expected by the market. Compared to the same period the year before, the mainland economy grew 2.7%, down from the 3.0% expansion tallied in the previous quarter. Meanwhile, overall GDP increased a seasonally adjusted 0.5% over the previous quarter, more than halving the 1.1% expansion recorded in the third quarter. On an annual basis, overall GDP slowed to 1.5% in the final quarter of 2011, markedly down from the 4.0% expansion recorded in the third quarter. According to the statistical institute, total GDP was slightly less than mainland GDP due to a decrease in gross value added in petroleum activities and ocean transport. The moderation over the previous quarter was entirely due to a deteriorating external sector, while domestic demand improved noticeably (Q3: -0.8% qoq; Q4: +2.2% qoq). Private consumption grew 0.6% over the previous quarter (Q3: +0.3% qoq), while government spending moderated somewhat to 0.5% (Q3: +0.7% qoq). Gross fixed capital investment slowed to 0.8% (Q3: +2.4% qoq), but GDP benefited from higher stockpiling, which drove overall investment up. The external sector was strongly affected by lower shipments of crude oil and natural gas, which account for around 40% of total exports. Exports of goods and services dropped 4.3% over the previous three-month period, which contrasted a 6.2% expansion in the third quarter. On the other hand, imports contracted a mild 0.6%, contrasting the 1.6% rise seen in the previous quarter. As a result, the external sector's net contribution to overall growth swung from plus 1.9 percentage points in the third quarter to minus 1.6 percentage points in the fourth quarter. In the full year 2011, the mainland economy expanded 2.6%, beating the 1.9% rise seen in 2010. Meanwhile, overall GDP grew 1.6% (2010: +0.7% year-on-year).