In Norway, the mainland economy (excluding oil, gas and shipping) will shrink by 3.3 per cent this year, followed by an upturn of 3.6 per cent in 2021. Overall Norwegian GDP will fall by 2.6 per cent this year and then grow by 3.4 per cent in 2021 and 3.1 per cent in 2022. Our forecast was made before official second quarter GDP figures were published. Norway’s recovery is being weighed down by weak activity in the oil sector, but an unprecedented policy response – with the government also using capital from the Government Pension Fund Global (or Oil Fund) – is providing support to the household sector and helping to fuel the upturn in home prices. Late in 2022 Norges Bank will begin to hike its key interest rate.
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