Norway GDP

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Norway: Growth improves in Q4

February 11, 2015

In Q4, total GDP increased a seasonally-adjusted 0.9% over the previous quarter, which nearly doubled the 0.5% expansion tallied in Q3. The reading overshot the 0.6% increase that market analysts had expected. According to the statistical office, Q4’s acceleration reflected an improvement in the external sector, whereas domestic demand deteriorated notably due to falling investment. Compared to the same quarter of the previous year, GDP accelerated from a revised 1.8% growth in Q3 (previously reported: +2.1% year-on-year) to a 3.2% expansion in Q4. In the full year 2014, the economy expanded 2.2% (2013: +0.7%).

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 Q4. The reading came in above the revised 0.1% increase observed in Q3 (previously reported: +0.4% quarter-on-quarter). Moreover, the expansion slightly exceeded the 0.4% rise the market had expected. Compared to the same period of the previous year, the mainland economy grew 2.3% in Q4 (Q3: +2.3% yoy). In the full year 2014, GDP increased 2.3% (2013: +2.3%).

Domestic demand deteriorated markedly over the previous quarter, reflecting a sharp contraction in investment (Q3: -1.5% qoq; Q4: -2.7% qoq), which represented the largest drop since Q2 2011. Conversely, private consumption and government spending performed well, expanding 1.0% (Q3: +0.1% qoq) and 0.9% (Q3: +0.6% qoq) respectively.

The external sector improved, as exports of goods and services expanded a solid 3.4% over the previous quarter, which followed the 1.4% increase tallied in Q3. Imports, however, fell 3.7% in Q4, which contrasted the 2.8% increase tallied in Q3. Consequently, the contribution from net exports to overall economic growth swung from minus 0.3 percentage points in Q3 to plus 2.4 percentage points in Q4.

The Central Bank expects total GDP to rise 1.25% in 2015 and 1.75% 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 2.25% 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: Ricard Torné, Head of Economic Research

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Norway GDP Q4 2014

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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