Norway: GDP in line with Norges Bank

Norway Mainland Q4 GDP growth was 0.6 %q/q compared to our forecast at 0.4% and consensus of 0.5% q/q. Growth in Q3 was 0.8% (not revised).

It is service production outside the retail sector which pulls up, contributing 0.4% points. But also construction, manufacturing and public sector production grew at a healthy pace in Q4. Electricity pulled down as expected.

Mainland domestic demand grew more than we had expected (1,2% q/q excluding inventories) . This could indicate that the effect of the international and financial unrest on the economy will be less than one could have feared. But of course export will be hurt and was weak in Q4.

Excluding electricity production, growth was 0.8%. That is in line with Norges Banks forecast. Norges Bank will conclude that capacity utilization is about as expected, if anything on the strong side since unemployment is somewhat lower than forecasted. We are more certain that rates will be on hold.

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