Norway: Economy returns to growth in Q2
The Norwegian economy avoided technical recession in the second quarter of 2022, as GDP rebounded 0.7% on a seasonally-adjusted quarter-on-quarter basis. The expansion contrasted the prior quarter’s 0.9% contraction. The economic performance was in accordance with the reopening of the economy, as restrictions to curb the spread of the Omicron variant earlier in the year were lifted. Similarly, the mainland economy—which excludes petroleum activities and related ocean transport—grew 0.7% on a seasonally-adjusted quarter-on-quarter basis in Q2, also returning to growth from the previous quarter’s 0.4% decline.
Domestically, the quarterly improvement was spearheaded by private consumption returning to growth, which came in at a seasonally-adjusted quarter-on-quarter rate of 3.2% in Q2, contrasting the prior period’s 2.3% decline. The 0.6% growth in employment levels in Q2 likely provided some support against mounting price pressures in the period, which partly eroded consumers’ purchasing power. Similarly, government spending rebounded a quarterly 0.2% in Q2 (Q1: -1.5% s.a. qoq). Conversely, fixed investment contracted at a sharper rate in the second quarter, declining a sharp 1.1%, which was a deterioration from Q1’s 0.4% fall.
On the external front, exports of goods and services expanded 0.9% on a seasonally-adjusted quarter-on-quarter basis in Q2, returning to growth from the 2.2% decline posted in Q1. A continued decline in exports of crude oil and natural gas capped the overall improvement. Meanwhile, imports of goods and services growth accelerated to 4.3% (Q1: +0.9% s.a. qoq). Consequently, the external sector detracted 1.1 percentage points from overall growth, matching Q1’s figure.
On an annual basis, total economic activity growth softened in Q2, coming in at 3.9%, which was below Q1’s 4.9% increase. Similarly, mainland economic growth softened to 4.6% year on year in Q2, down from the prior quarter’s 6.0% rise.