Slower growth in Norwegian economy

Norway's gross domestic product (GDP) grew by 2.0 per cent in volume from 1997 to 1998, according to preliminary figures from the national accounts. The mainland economy grew by 2.9 per cent. Production growth from the previous year was considerably lower in the fourth quarter than in the first three quarters of 1998. 1998 brought the first current account deficit, provisionally estimated at NOK 8.7 billion, of the decade.

Final consumption expenditure of households and non-profit organizations increased 3.2 per cent in volume from 1997 to 1998. Consumption of goods increased the most, at 3.9 per cent. The volume growth in consumption of services was estimated at 2.6 per cent. Seasonally adjusted figures show that final consumption expenditure of households and non-profit organizations was 1.5 per cent lower in the fourth quarter compared with third quarter 1998.

In government, consumption expenditure measured in volume was 2.8 per cent higher in 1998 than in 1997. The growth was somewhat stronger in local government than in central government, 3.5 and 1.8 per cent respectively. Preliminary local government figures show a 2.4 per cent growth in employment, while employment in central government was unchanged with the exception of the military defence.

Sharp growth in oil investments

Gross investment in oil activities in 1998 was all of 22.3 per cent higher than the year before, measured in constant prices. For Mainland Norway the calculations show an investment volume growth of 2.0 per cent on an annual basis, with a decline in the fourth quarter compared with the year before. Towards the end of the year there was a definite volume decline in housing investments and investments in service industries. Adjusted for normal seasonal variations, total gross fixed capital formation declined from the third to the fourth quarter in 1998, driven down by lower oil investments and a downturn in housing construction while investments in other business and industry and government increased.

Deteriorating balance of payments

Preliminary estimates show a current account deficit of NOK 8.7 billion in 1998, compared with a surplus of NOK 56.8 billion in 1997. For fourth quarter 1998 the deficit was NOK 11.5 billion. The export value of crude oil and natural gas in 1998 was down NOK 43.6 billion or a good 26 per cent from 1997. This is mainly because of an estimated price decline of about 24 per cent.

Overall exports grew 0.5 per cent in volume in 1998, while the import volume increased 6.9 per cent. For traditional goods, import and export growth was somewhat higher, 3.7 and 9.5 per cent respectively. Corrected for seasonal fluctuations, overall exports increased 1.2 per cent from third to fourth quarter last year, while imports increased two per cent.

Cutback in oil production

Annual volume growth in industrial production was two per cent in 1998. There was a small decline, 0.4 per cent in the fourth quarter, compared with fourth quarter last year. For oil and gas extraction the preliminary figures show a volume decline last year of 3.5 per cent, somewhat stronger in the second half than in the first half. In construction, output grew sharply in 1998, increasing 4.4 per cent in volume. Seasonally adjusted figures show a decline in industrial production from third to fourth quarter last year, while oil and gas production increased.

New Statistics
Quarterly national accounts, 4th quarter 1998.
The statistics are published quarterly in the Weekly Bulletin of Statistics and Economic Analyses, and annually in the Official Statistics of Norway (NOS). For more information contact: Kristian.Gimming@ssb.no, tel. +47 21 09 44 17, Pia.Tonjum@ssb.no, tel. +47 21 09 48 34, or Tore.Halvorsen@ssb.no, tel. +47 21 09 48 48.

Weekly Bulletin issue no. 5, 1999