GDP growth taps the breaks in Q1

The Norwegian economy started 2024 on softer footing: Nationwide GDP expanded 0.2% in seasonally adjusted quarter-on-quarter terms, decelerating from Q4 2023’s 1.6% increase. Similarly, the mainland economy—which excludes petroleum activities and related ocean transport—rose 0.2% in Q1, down from the prior quarter’s 0.3% growth. Q1’s mainland economy result was largely in line with market expectations.

The nationwide GDP slowdown was due to a broad-based deterioration. Domestically, public spending growth halved to 0.5% quarter on quarter in the three months to March (Q4: +1.0% s.a. qoq). Meanwhile, private consumption swung to a contraction and declined 0.7%, deteriorating from the fourth quarter’s 0.3% increase and posting the worst result in a year. Similarly, fixed investment contracted 7.3% on a seasonally adjusted quarter-on-quarter basis in Q1 (Q4: +0.5% s.a. qoq), a multi-year low. Turning to the external front, exports of goods and services growth waned to 0.4% in the first quarter, slowing from the prior period’s 3.4% increase. Conversely, imports of goods and services rebounded in Q1 and rose 1.0%, compared to Q4’s 0.3% fall. Meanwhile, on a seasonally adjusted annual basis, nationwide economic GDP rose 1.1%, picking up slightly from the prior quarter’s 1.0% increase. Similarly, seasonally adjusted annual mainland GDP growth also accelerated and came in at 0.6% (Q4: +0.5% yoy).

Our Consensus is for nationwide GDP to expand at a similar sequential pace to Q1’s for the rest of the year. Overall in 2024, economic growth is seen ticking up from 2023, reflecting a rebound in private consumption and stronger export growth.

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