Government officials like to point out that Norway’s economy is faring better than most other countries battered by the global financial crisis. On Tuesday, however, state statistics bureau SSB released new figures showing that Norway is now officially in recession as well.
SSB, also known as Statistics Norway, reported that seasonally adjusted figures show that the gross national product for the country’s mainland fell for the second quarter in a row. GNP fell 1 percent in the first quarter of 2009, after falling 0.8 percent in the fourth quarter of 2008.
The numbers show that Norway is being hit harder by the world economic slowdown that previously thought. Norway’s offshore oil and gas industry has continued to pump petrokroner into the national treasury, but mainland industry has slowed considerably.
The metals and forest products businesses contributed the most to the decline. Both are being hit by much lower activity in the construction industry.
The retail services sector also logged major declines, as Norwegian consumers ended their shopping spree of the past few years.Production of electrical power also fell dramatically in the first quarter of this year, which took a major toll on the mainland GNP (which excludes offshore revenues).
Norway’s overall GNP, including its offshore activity, also logged a decline of 0.4 percent in the first quarter. This was blamed largely on a sharp decline in shipping revenues while oil and gas production were mostly unchanged.
All told, Norwegian households reduced consumption, industrial investment fell dramatically, foreign trade declined because of a fall in exports and employment fell as well. One analyst at the country’s largest bank, DnB NOR, noted that the effect of government stimulus plans hasn’t been felt yet and said he expected unemployment to keep rising throughout 2009.
It’s the first time in six years that Norway’s GNP has declined.