Norway Economy Expands 0.8% On More Household Spending

(RTTNews) - The Norwegian mainland economy expanded at a faster pace in the fourth quarter, underpinned by increased household consumption of goods, data published by Statistics Norway said Wednesday.

Mainland Norway gross domestic product increased 0.8 percent sequentially, faster than the 0.6 percent rise in the third quarter.

At the same time, overall GDP advanced only 0.2 percent in the December quarter, well below the 1.3 percent expansion seen in the previous quarter.

The expenditure-side breakdown showed that the expansion was driven solely by household consumption. Household spending gained 5.9 percent on strong goods consumption amid a sharp increase in car purchases.

Data showed that government spending rose 0.9 percent, and gross investments grew 1.1 percent in the final quarter of 2022.

During the year 2022, the Norwegian economy expanded 3.8 percent compared to 2021.

The high growth in 2022 was driven by increased service consumption and normal operation in the industries after lifting the pandemic-related restrictions.

In December, gross domestic product rose 0.4 percent versus a flat change in the previous month.

"Norway's mainland economy put in a much better performance in Q4 than the central bank expected and ended the year with a healthy expansion in December," Jack Allen-Reynolds, an economist at Capital Economics, said.

"Together with the continued strength in inflation, it now looks likely that the Norges Bank will continue raising interest rates after March," Allen-Reynolds added.

Separate official data revealed that Norway's trade surplus shrank to NOK 102.8 billion in January from NOK 148.8 billion in December. A year ago, the surplus was NOK 106.3 billion.

On a yearly basis, exports showed no variations in January, while imports rose by 5.1 percent. Compared to the previous month, both exports and imports plunged by 26.6 percent and 19.7 percent, respectively.

Meanwhile, the trade deficit for Mainland Norway narrowed to NOK 20.4 billion in January from NOK 25.5 billion in December.