Norway’s economic growth slows in 1Q

OSLO • Economic growth in western Europe’s largest exporter of oil and gas (O&G) slowed more than forecast in the rst quarter (1Q), sending a warning to policymakers preparing for a third interest-rate increase in June.

Mainland GDP, which excludes oil and shipping, expanded 0.3% in the quarter, Statistics Norway said in a statement yesterday.

That was down from a revised 1.1% in the previous quarter.

A Bloomberg survey of 12 economists predicted a quarterly expansion of 0.4%, and the central bank had forecast 0.6%.

Economic growth in the 1Q was dragged down by a 1.2% decline in investments and a pick-up in imports.

Overall GDP growth, which includes O&G production and shipping, shrank 0.1% in the quarter.

Norges Bank embarked on a tightening cycle in September, raising rates for the first time in seven years.

It also boosted rates in March and last week flagged that another tightening will “most likely” come in June.

Earlier this month, the International Monetary Fund said it sees Norway mainland economy expanding by 2.5% this year and 2.1% in 2020.

“The figures are partly affected by negative supply-side effects in power production and fisheries.

“Hence, even if a bit lower than expected in the Monetary Policy Report from March (+0.6 %), Norges Bank will probably consider the weakness as temporary,” said Frank Jullum, an economist at Danske Bank. — Bloomberg