NORWAY
Norway Q4 mainland GDP was a touch stronger than expected at +0.2% Q/Q (vs 0.1% prior and cons). Overall, national GDP was +1.5% Q/Q (vs an upwardly revised -0.4% prior). Norges Bank had projected 0.0% Q/Q in its December MPR.
- Today's print aligns with the Norges Bank's commentary in the January Monetary Policy Assessment, where they noted "household consumption appears to have been somewhat higher than projected towards the end of last year".
- Looking at the expenditure side of the economy, household consumption rose 0.7%, though this was led by goods consumption (+2.0% Q/Q) while services consumption was subdued (+0.1% Q/Q).
- However, on an annual basis, goods consumption still fell -8.5% Y/Y, while services rose +1.0%. A look at the sub-components suggests the goods weakness was broad-based, but furniture and household equipment saw the largest Y/Y fall of -7.9% Y/Y. This fall is nonetheless surprising given the steady recovery of retail sales seen over the past quarter.
- Mainland gross investment fell -0.8% Q/Q, dragged lower by services components, while the trade balance widened (exports rose 3.3% Q/Q while imports fell -0.7% Q/Q).
- A key input for the Norges Bank in determining when easing can begin will be how wage growth develops. Norges Bank currently expect annual wage growth to be 5.0% in 2024. The Q4 '23 national accounts indicate wages and salaries grew 6.0% Y/Y (vs 7.0% in Q3) and +1.5% Q/Q. Adjusted for total hours worked, wages and salaries grew 5.7% Y/Y in 2023 compared to 4.2% in 2022.
- On Friday (16 Feb), TBU (the Norwegian Technical Calculation Committee for Wage Settlements) will report their CPI estimates for the year, which will feed into wage negotiations starting 15 March.
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