Good times likely to roll into 2013

Norway’s strong, oil-fueled economy looks set to stay that way in 2013, according to the country’s biggest bank, DNB. Its analysts and economists predict low interest rates, another rise in consumption and more economic growth throughout next year.

The growth rate may be slower, at 2.4 percent instead of this year’s 3.5 percent, but that will still lead to what the Norwegians call continued velstand (prosperity).

‘Careful upturn’ abroad
Øystein Dørum, chief economist at DNB, tied that to signs of recovery in both Europe and the US. DNB’s analysts think that this year’s economic downturn of 0.4 percent in Europe will turn into a “careful upturn” of 0.3 percent in economic growth. In the US, the numbers also look better, and the bank is taking an optimistic view, predicting growth of around 2.6 percent.

Kyrre Aamdal, senior economist in DNB Markets, said the slower growth predicted for the Norwegian economy is based on two main factors: “For one thing, we expect lower investment in the oil sector,” Aamdal told reporters when presenting DNB’s prognosis for 2013. “At the same time, export firms will feel the effects of the strong krone, and that the economy in Europe is still weak.” Around 80 percent of Norwegian exports go to countries in the European Union (EU), which long has ranked as Norway’s biggest trading partner.

Aamdal doesn’t forecast any “shopping sprees” for Norwegians next year, but does think consumption will rise by around 3 percent. He thinks pay growth will rise by around 4 percent again, a bit lower than this year.

Interest rates to stay low
Norway’s central bank, Norges Bank, already has signaled that its executive board is unlikely to raise interest rates before March at the earliest, which means they’ll remain at record low levels, currently 1.5 percent for the bank’s key lending rate. DNB thinks rates will remain unchanged all year long, to help prevent Norway’s currency from getting even stronger than it already is.

“Even though there’s strong growth in both housing prices and home loans, Norges Bank doesn’t have much room when it comes to adjusting interest rates,” Aamdal told news bureau NTB. “Slightly lower economic growth allows them to keep the rates so low.”

Associated companies:


Related news

Latest news

USCG confirms OPtimarin in Line for Ballast Water Approval

The United States Coast Guard (USCG) has confirmed that Norwegian ballast water treatment specialist Optimarin has become the first supplier to submit an application for type approval.

New order for Servogear

Servogear announces that they have received a new order from Brødrene Aa. 

Norwater AS reports boost in sales

The Norwater team reports of great interest and busy days in 2016. In a press release, they state that as of the first 8 months of the year, 2016 sales are already beyond target for the year as a whole.

Gaia-facts reaching ground control

The European Space Agency (ESA) has released the first data from the Gaia mission, which has the tremendous task of building the most precise 3D map of the Milky Way.

Polish delegation for Norwegian circular waste management

Against the background of the EU's ambitious waste management targets, Norwegian and Polish stakeholders met on Wednesday 14 September in Drammen.

Milestone at Mongstad Water Treatment Plant

SAR AS reports that an extensive upgrade to the water treatment plant at Mongstad reached a new milestone July. 

Servogear signs new contract with Özata Shipyard

Servogear has announced the signing of a new contract with Özata Shipyard in Turkey. The contract includes the delivery of Servogear Ecoflow PropulsorTMfor two 39 meter passenger catamarans (YN 41 & YN 42).

Statoil and Petrobras strengthen strategic partnership

Statoil reports that they have strengthened their cooperation in Brazil by signing a Memorandum of Understanding (MoU) with Petrobras.

TechInvent and Island Offshore/Centrica announced winners of ONS Innovation Award

TechInvent and Island Offshore/Centrica were announced winners of the ONS 2016 Innovation Awards, at the Innovation Awards Ceremony Tuesday 30 August.