Economic Survey 4-2003

The Norwegian economy bottomed out in the first half of 2003. According to the quarterly national accounts (QNR), mainland GDP growth was 0.5 per cent in the second quarter and 0.8 per cent in the third quarter, i.e. markedly higher than projected trend growth. The rise in unemployment came to a halt in the second quarter of the year. If this means that unemployment has peaked and is falling, the turnaround in the labour market will occur at an earlier stage than previously projected. The pronounced cyclical upswing is expected to continue through 2004, followed by a gradual moderation in growth through 2005 and 2006. Unemployment will nevertheless only fall somewhat over the next two years partly because productivity growth is expected to be high and because higher employment and lower unemployment will lead to an increase in the supply of labour.