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NORWAY: Slightly Softer Than Projection Growth, But Unlikely To Sway NB Yet

NORWAY
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Norwegian Q2 mainland GDP was 0.1% Q/Q, below analyst consensus, the Norges Bank’s June MPR projection and the Q2 Regional Network Survey indication of 0.2%. The Q1 reading was also revised a tenth lower to 0.1% Q/Q. At first glance, this doesn’t represent enough of a “pronounced slowdown” in the Norwegian economy to sway the Norges Bank from its current hawkish guidance. 

  • We think the Q3 Regional Network Survey (due in September) will be of more consequence in this regard, as it provides a forward-looking view into Q3 and Q4 growth.
  • Household consumption rose 1.5% Q/Q, but this was driven by an increase in car purchases (which are volatile). Excluding transport means, consumption rose 0.7% Q/Q.
  • The oil and gas extraction industry continued to buoy Norwegian growth overall though, with GDP rising 1.4% Q/Q (vs a one tenth upwardly revised 0.3% prior).
  • Total exports were thus supported by crude oil and natural gas sales, rising 5.6% Q/Q (vs -1.4% prior). Import growth meanwhile rebounded 3.1% Q/Q (vs -0.4% prior). 
  • Gross fixed capital investment rose 5.1% Q/Q, with extraction and transport via pipeline investment rising 10.0% Q/Q. We expect the offshore sector to continue to outperform in 2024, particularly after the Q3 oil investment survey signalled another increase in investment expectations.
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Norwegian Q2 mainland GDP was 0.1% Q/Q, below analyst consensus, the Norges Bank’s June MPR projection and the Q2 Regional Network Survey indication of 0.2%. The Q1 reading was also revised a tenth lower to 0.1% Q/Q. At first glance, this doesn’t represent enough of a “pronounced slowdown” in the Norwegian economy to sway the Norges Bank from its current hawkish guidance. 

  • We think the Q3 Regional Network Survey (due in September) will be of more consequence in this regard, as it provides a forward-looking view into Q3 and Q4 growth.
  • Household consumption rose 1.5% Q/Q, but this was driven by an increase in car purchases (which are volatile). Excluding transport means, consumption rose 0.7% Q/Q.
  • The oil and gas extraction industry continued to buoy Norwegian growth overall though, with GDP rising 1.4% Q/Q (vs a one tenth upwardly revised 0.3% prior).
  • Total exports were thus supported by crude oil and natural gas sales, rising 5.6% Q/Q (vs -1.4% prior). Import growth meanwhile rebounded 3.1% Q/Q (vs -0.4% prior). 
  • Gross fixed capital investment rose 5.1% Q/Q, with extraction and transport via pipeline investment rising 10.0% Q/Q. We expect the offshore sector to continue to outperform in 2024, particularly after the Q3 oil investment survey signalled another increase in investment expectations.