Scandinavia’s Richest Consumers Propel Norwegian Economic Growth
Norway’s economy expanded in the first quarter as rising consumer spending offset a decline in investments and a weaker oil industry.
Seasonally adjusted gross domestic product, excluding oil, gas and shipping, rose 0.5 percent, after growing a revised 0.5 percent the prior three months, Oslo-based Statistics Norway said today. That was in line with the average of 12 economists’ estimates compiled by Bloomberg. Total output grew 0.3 percent, compared with an estimate for a 1 percent growth.
Consumer spending rose 0.8 percent in the quarter, while investment fell 1.8 percent. Exports rose 1.6 percent and imports declined 2.6 percent, the agency said. Petroleum and shipping dropped 0.2 percent and final domestic use of goods and services fell 1.2 percent.
“The weakness we saw through 2013 will continue throughout 2015 as we see a significant cooling down in the oil sector,” Joachim Bernhardsen, an analyst at Nordea Bank AB, said before the report. “Growth in the housing sector and in residential investments will probably remain modest.”
Consumers are sustaining an expansion in Scandinavia’s richest economy per capita after home prices recovered from declines in 2013 and as registered unemployment remains below 3 percent. An 8 percent weakening of the krone versus the euro over the past year has also helped exporters.
Norges Bank kept its benchmark interest rate at 1.5 percent this month to support the expansion and stuck to a plan to tighten policy in the “summer” of 2015. To further stimulate growth, the government last week in a revised budget estimated it would use a record 140.9 billion kroner of the nation’s oil revenue, equal to about 5.8 percent of GDP.
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