Fresh figures from Statistics Norway show a flat development in the Norwegian economy in the 3rd quarter. The national accounts show the state of the Norwegian economy. It means how the gross domestic product (GDP) develops. From the second to the third quarter of this year, GDP Mainland-Norway advances by 0.1 per cent. Pål Sletten, section head for national accounts at Statistics Norway, says that the Norwegian economy is in a cyclical phase where weaker demand dampens growth. He points to three things in particular: With high prices and higher interest rates, the household goods have less to buy for. This reduces growth in the Norwegian economy. In the last year, fewer houses have been built. It also slows down growth. On the other hand, oil investments have increased growth, but not so much that it makes up for it. This means that even if the GDP is stable, i.e. that the Norwegian economy and value creation are at a standstill, this is, among other things, because households have less to spend. – The high prices have meant that incomes have not been able to keep up with the rise in prices, and this means that many feel that they can afford less. Back after the pandemic In August, the Norwegian economy shrank by 0.2 per cent, which was the same as the increase in June. Also in 2023, the Norwegian economy has stood still, without any clear upswing or downswing. – So how is the Norwegian economy actually doing? – If we look at it broadly in a two-three year perspective, the good news is that the Norwegian economy is back on after the pandemic. We got a lot of people to work. In 2023, Norges Bank has raised the key interest rate seven times. They have also announced that there will be another interest rate hike later this year. Then the banks often follow suit, which means that you have to pay more down on the loan each month. – We are already seeing the interest rate increases, but there are several things happening at the same time. We especially see it in housing construction, but also in the demand from households. Because prices have risen and interest rates have increased, and people have less money. Pål Sletten, section head for national accounts at Statistics Norway, says that the Norwegian economy has turned on again after the pandemic. Photo: Kristie M. Gutterød Extreme weather “Hans” increased electricity production Earlier this autumn, extreme weather “Hans” hit Norway. Red warning signs, embarrassment and clean-up were part of most of the headlines for several weeks. This has also affected the Norwegian economy. Not just all the actual destruction, but also how we use money: – It affects activity in the economy, i.e. what people do. Prime Minister Jonas Gahr Støre visited one of the gardens that was affected by the extreme weather “Hans” in Ål. Photo: Terje Pedersen / NTB Among other things, agriculture will have a bad year in 2023, says Sletten. – It is not just “Hans” to blame, but also the drought earlier this year. The consequence is that agriculture has developed very weakly. The extreme weather has also had a positive impact on the economy. – All the rainfall filled the reservoir. A lot of electricity was produced in the 3rd quarter, says Sletten.
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Flat development in the Norwegian economy in the 3rd quarter – news Norway – Overview of news from different parts of the country
