Norway’s mainland GDP growth surpasses forecast in Q2

Norway’s mainland GDP growth came in above the central bank and consensus forecast in the second quarter, indicating that the growth has reached the bottom. Mainland GDP growth came in at 0.4 percent in sequential terms in the second quarter, as compared with consensus and Norges Bank’s projections of 0.3 percent. Stripping electricity, growth came in at 0.6 percent. On an annual basis, the mainland GDP expanded 0.6 percent, above the central bank’s projection of 0.4 percent.

The economic growth in Norway has rebounded in the first half of 2016 as compared with the zero growth recorded in the second half of last year. Currently, growth is a bit on the upside to the central bank’s forecast.

Electricity production dropped strongly, as projected, and was a drag on the overall growth. It negatively contributed 0.2 percentage points. Manufacturing production also declined. Meanwhile, the services sector and construction sector expanded at a stronger rate and above expectations.

The demand scenario also came in quite well. Mainland investment growth came in quite strong, while robust growth in consumption of services signified that private consumption expanded 0.4 percent in sequential terms. Exports came in slightly mixed with goods continue to fall. However, services exports improved following a very subdued first quarter. On the other hand, employment fell 0.1 percent quarter-on-quarter.