Norway: Total GDP growth disappoints in first quarter on worsening oil activity
May 16, 2013
In the first quarter, total GDP fell a seasonally adjusted 0.2% over the previous period. The print contrasted both the revised 0.1% rise tallied in the last quarter of 2012 (previously reported: +0.4% quarter-on-quarter) and the 0.3% expansion expected by market analysts. According to the statistical institute, total GDP was dragged down by a sharp contraction in petroleum activities and ocean transport. On an annual basis, total GDP deteriorated sharply from a 1.9% rise in the fourth quarter to a 2.7% drop in the first, marking the steepest fall observed since Q2 2009.
Meanwhile, Norway mainland's GDP - which consists of all domestic production activity except for extraction of crude oil and natural gas (including related services), pipeline and ocean transport - rose a seasonally adjusted 0.7% over the previous quarter. The print marks an acceleration over the 0.2% expansion recorded in Q4 2012 (previously reported: +0.3% qoq) but undershot the 0.8% increase expected by the market. Compared to the same period last year, the mainland economy slipped 0.6% in the first quarter, which contrasted the 2.8% increase tallied in the previous three-month period.
Both private consumption (Q4: +0.4% qoq; Q1: +1.0% qoq) and government spending (Q4: +0.4% qoq; Q1: +0.5% qoq) accelerated over the previous period and remained as one of the main growth engines. On the other hand, gross fixed capital investment slowed markedly in Q1 (Q4: +1.8% qoq; Q1: +1.0% qoq). Moreover, GDP was negatively affected by a destocking process.
On the the external side of the economy, exports of goods and services improved in the first quarter, expanding a seasonally adjusted 0.2% over the previous three-month period (Q4: -2.0% qoq). Meanwhile, imports rose 0.3%, contrasting a 1.5% contraction in the fourth quarter. As a result, the external sector's net contribution to overall growth improved from minus 0.3 percentage points in the fourth quarter to zero growth in the first.
The Central Bank expects total GDP to rise 1.8% in 2013, before accelerating to a 2.3% rise in 2014. FocusEconomics Consensus Forecast panellists see total GDP increasing 2.0% in 2013, which is down 0.1 percentage points from last month's estimate. For 2014, the panel expects the economy to expand 2.4%.
Meanwhile, the Bank sees Mainland GDP expanding 2.8% in 2013 and 3.0% in 2014. FocusEconomics Consensus Forecast panellists expect Mainland GDP to increase 2.6% in 2013, which is unchanged from last month's projection. In 2014, panellists see GDP growth rising to 2.7%.