Norway’s GDP Expands More Than Estimated as Exports AdvanceSaleha Mohsin
Norway’s economy grew more than estimated in the fourth quarter as exports and consumers supported an expansion in Scandinavia’s richest economy.
Seasonally adjusted gross domestic product, excluding oil, gas and shipping, expanded 0.5 percent, after growing a revised 0.1 percent in the prior three months, Oslo-based Statistics Norway said today. Growth was seen at 0.4 percent, according to the median estimate in a Bloomberg survey. Total output grew 0.9 percent, compared with an estimate for 0.6 percent growth.
Norges Bank “should be in no hurry to cut rates further, we expect weaker data to be more visible going into the June meeting,” said Kyrre Aamdal, a senior economist at DNB ASA, said by phone in Oslo.
Norges Bank delivered a surprise rate cut in December it said was triggered by a drop in oil prices. The central bank sees a 50-50 chance it may need to lower rates again to prevent a “severe downturn” in the economy, Governor Oeystein Olsen said in December.
The krone was little changed at 8.576 per euro as of 10:35 a.m. in Oslo.
The economy of western Europe’s biggest crude producer is under pressure as Brent crude has fallen 50 percent since a June high, triggering job and spending cuts at companies such as Statoil ASA.
While policy makers say that Norway isn’t in a “crisis,” Prime Minister Erna Solberg signaled last month that the government is “on alert” to provide stimulus if necessary. The country’s sovereign wealth fund, worth $860 billion, is available to plug budget deficits.
As the oil industry struggles, companies such as Norsk Hydro ASA, a maker of aluminum, and Yara ASA, which makes fertilizer, today reported rising earnings as the weakening krone boosted their competitiveness. The U.S. dollar is up 24 percent against the krone over the past year. The currency is down against all major counterparts, except the Swedish krona.
Exports rose 3.4 percent in the fourth quarter, while the petroleum and shipping industry gained 2.5 percent. Consumer spending rose 1 percent. Fixed capital formation fell 2.7 percent, declining for a second consecutive period.
“The increase in the fourth quarter was primarily pulled up by exports of machinery and other equipment as well as chemical and mineral products,” the statistics agency said. “Preliminary figures show growth in exports of services in the fourth quarter.”