Domestic demand will be sustained by solid household financial buffers and an improving labour market, while high capacity utilisation will help fuel capital spending outside the oil sector. Norway’s mainland economy will grow by 3.5−4 per cent during both 2021 and 2022, before growth is slowed by gradually higher interest rates. Norges Bank will accelerate its rate hikes due to high resource utilisation, and despite below-target CPI-ATE inflation throughout our forecast period. By end-2023 the key rate will stand at 1.75 per cent.
Norwegian GDP growth will accelerate to 2.8 per cent in 2021 and 3.7 per cent in 2022, followed by a slowdown to 2.6 per cent in 2023.