GDP in Norway

Norway - GDP

Economic growth eases slightly in July

Economic output increased 0.7% over the prior month in seasonally-adjusted terms in July, easing from the 0.9% expansion recorded in June. Meanwhile, the economy grew 2.2% in the rolling quarter of May–July relative to the previous quarter (February–April), coming in markedly above the 1.1% expansion logged in April–June.

Mainland GDP—which excludes hydrocarbon extraction and related services—rose 0.4% over the prior month in July, down from the 0.8% increase clocked in June. In the rolling quarter of May–July, the mainland economy grew 2.5% from the previous rolling quarter (February–April), improving from the 1.4% expansion registered in April–June.

Domestically, July’s slowdown was due to fixed investment dropping back to a contraction over the previous month (July: -1.4% s.a. mom; June: +1.8% s.a. mom). Moreover, government spending growth eased to 0.1% in July from 0.4% in June. More positively, private consumption expanded 2.6% in July, improving from June’s 2.0% growth.

Meanwhile, the external sector contributed positively to the overall reading, with growth in exports of goods and services accelerating to 1.8% in July from 1.2% in June. Conversely, imports of goods and services swung back to contraction in the same month (July: -3.5% s.a. mom; June: +1.2% s.a. mom).

Reflecting on the role consumers will play in the recovery and what the consumption trend will look like ahead, Lina Fransson, economist at SEB, noted:

“The recovery is now being led by strong households with support from fiscal stimulus. […] We now foresee a clear shift in consumption. Historically high savings, lower unemployment, unexpectedly strong wage growth and pent-up needs suggest a strong recovery in service consumption, which remains more than 10.0% lower than before the Covid-19 crisis.”

FocusEconomics Consensus Forecast panelists see total GDP growing 3.1% in 2021, which is down 0.1 percentage points from last month’s forecast, and expanding 3.0% in 2022. In terms of mainland GDP, our panelists project growth of 3.7% in 2021, which is unchanged from last month’s estimate, and 3.6% in 2022.