Companies are calling employees back to work, consumer spending is up, housing prices and the stock market are rising, and fears of widespread unemployment are being sharply reduced. Norway has often proven itself to be different from other countries, and now its success at working its way out of the global financial crisis is setting it apart as well.
Newspaper Dagsavisen summed it up nicely on Friday with the one-word, front-page headline “Annerledeslandet.” The word “annerledes” means “different” in Norwegian, and the phrase applying it to the land itself was widely used after Norway once again voted against joining the European Union in 1994. It was a time when many countries were trying to join the EU. Norwegians, albeit by a fairly narrow margin, wanted to keep doing things their own way.
Norway has since continued to exert its “different” way of doing things in everything from social to economic policy, and now the latter is clearly paying off. Norway’s vast oil and gas wealth is helping it tackle the financial crisis, as are government “crisis packages” that seem to be working. Even Norwegian economists seem surprised.
“The picture is much better than I had dared hope,” Harald Magnus Andreassen, chief economist at First Securities, told newspaper Dagens Næringsliv . New figures show a marked slowdown in what had been a rising rate of unemployment, with only 1,400 more people out of work in May compared to around 4,000 in earlier months this year.
Andreassen isn’t alone in being pleasantly surprised by Norway’s economic developments. “There’s no doubt that we’re getting many signals that the crisis won’t be as bad as we feared,” Ola Grytten, an economics professor at business school NHH (Norges Handelshøyskole), told Dagsavisen .The numbers are just too good not to see that Norway’s economy is bouncing back, even though the country did technicallygo into recessionearlier this year. For example:
— The unemployment rate in the 16 EU countries using the euro continues to rise and now stands at around 9.5 percent. In Norway, the unemployment rate is less than 4 percent and economists are predicting that far fewer people are likely to be out of work by the end of the year than predicted. State employment agency NAV reports that it has around 1,000 jobs waiting to be filled every day.
— State statistics bureau SSB reported this week thatconsumer spending was up nearly a full percentage pointfrom April to May, while spending was down sharply in the UK and the US. More spending means more demand for goods and services, and that’s good for business.
— Housing prices have gone up 12 percent since December, reports Norway’s real estate brokers’ trade association. That means prices are now just 3 percent lower than they were when the market is widely believed to have topped out in August 2007.
The Norwegian government has pumped around NOK 500 billion into the economy during the past year, as part of its economic stimulus package. That money has come mostly from Norway’s oil and gas revenues, which the government previously held back. Oil prices have held up, “and that’s the reason we’ve managed to maintain our good, well-oiled economy,” said Grytten.