Norway Fixed Investment (ann. var. %)

Investment in Norway

Economy expands in the first quarter

The Norwegian economy gained momentum at the start of 2023: Total GDP expanded 0.2% on a seasonally adjusted quarter-on-quarter basis in the first quarter, accelerating from the flat reading posted in the fourth quarter of last year. Conversely, the mainland economy—which excludes petroleum activities and related ocean transport—posted the softest expansion in a year, with growth falling to a third of the prior period’s figure (Q1: +0.2% s.a. qoq; Q4: +0.6% s.a. qoq).

The economy’s quarterly improvement was chiefly due to the performance of the external sector. Domestically, public spending growth softened to 0.5% in Q1 (Q4 2022: +1.2% s.a. qoq). Meanwhile, fixed investment contracted 0.1% in Q1 (Q4 2022: +1.3% s.a. qoq). Lastly, private consumption contracted 5.1% in Q1, marking the worst result since Q2 2020 (Q4 2022: +5.2% s.a. qoq). Household consumption data was affected by an unfavorable base effect amid large fluctuations: A spike in car sales at the end of 2022 ahead of a tax increase in effect from 1 January 2023 prompted a 50% plunge in car sales in Q1 2023.

Conversely, on the external front, exports of goods and services increased 1.7% on a seasonally adjusted quarterly basis in Q1, which contrasted the fourth quarter’s 0.8% contraction. Imports of goods and services growth waned to 0.3% in Q1 (Q4 2022: +1.8% s.a. qoq). Consequently, the external sector contributed 0.5 percentage points to overall growth, improving from Q4’s 0.9 percentage point detraction.

Meanwhile, on an annual basis, total economic activity growth gained pace, accelerating to 3.0% in Q1, more than doubling Q4’s 1.2% increase. Similarly, mainland economic growth gained steam, growing 2.9% in Q1 (Q4: +1.6% yoy).