Norway’s GDP for the third quarter of 2022

The Norwegian economy gained momentum in the third quarter of 2022; GDP growth accelerated to 1.5% on a seasonally adjusted quarterly basis. The increase was higher than the 1.3% rise in the previous quarter, largely due to an improvement in the service industry and wholesale trade activity. In contrast, the mainland economy – which excludes petroleum activities and related shipping – grew by 0.8% on a seasonally adjusted quarter in the third quarter. While it was an expansion of less than 1.2% in the prior period, it still beat market expectations.

Domestically, the improvement was driven by fixed investment, which doubled its growth (Q3: +0.4% qoq; Q2: +0.2% qoq). In contrast, private consumption grew at a modest seasonally quarterly rate of 0.5% in the third quarter, lower than the second quarter’s 3.7% increase. An improvement in the labor market (Q3 unemployment rate: 3.2%; Q2: 3.3%), coupled with wage growth of 0.2%, could not protect consumers from rising inflation, eroding their purchasing power. Finally, government spending swung to a marginal quarterly contraction of 0.1% (Q2: +0.1% qoq).

On the external front, exports of goods and services expanded 5.7% on a seasonally adjusted quarter-on-quarter in the third quarter, more than double the 2.8% increase recorded in the second quarter. Conversely, the growth of imports of goods and services eased to 2.9% (Q2: +5.7% qoq). As a result, the external sector contributed 0.8 percentage points to overall growth, improving from the previous quarter’s loss of 1.0 percentage points.

On an annual basis, overall economic activity growth eased in the third quarter, coming in at 2.5%, down from the 4.4% increase in the second quarter. Likewise, economic growth on the mainland eased to 2.9% year-on-year in the third quarter, from a rise of 4.9% in the previous quarter.

FocusEconomics Consensus forecast committee members see GDP expanding by 1.5% in 2023, which is 0.2 percentage point lower than last month’s forecast, and growing by 2.1% in 2024. In terms of mainland GDP, committee members expect growth of 0.9% in 2023, which is down 0.3 percentage points from last month’s estimate, and 1.6% in 2024.

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