The New Year’s outlook for the Norwegian economy is even better than prospects were a few months ago, according to several local economists. They predict solid economic growth in 2011.
“We’re working now at adjusting our projections upwards,” Harald Magnus Andresssen, chief economist at First Securities in Oslo told newspaper Dagens Næringsliv (DN). Andressen said he sees several signs that demand from both business and households is rising both in Norway and internationally.
“Many of the international investment banks are raising their growth estimates for 2011,” he told DN. “We see that’s it’s beginning to loosen up on the investment side and that consumer demand is rising. German companies have never been so optimistic as in December 2010.”
Norway’s central bank has signaled that interest rates will rise in 2011, probably twice, with the first increase coming before summer. Andressen thinks it may come sooner, before Easter. Still, he says, “we expect good growth in private consumption.”
High electricity prices are among the few negative signs on the horizon, causing higher costs for business and households. “When people get their electricity bills in January and see how much they’ve gone up, it will have more effect on their consumption than, for example, interest rates,” Thomas Oborg, leader of the shopping center at Oslo’s fashionable Aker Brygge complex.
Kjersti Haugland, senior economist at DnB NOR Markets, is less optimist than Andressen but still expects “better development” in the economy. DnB NOR expects the mainland economy (excluding offshore oil and gas) to grow by 2.5 percent in 2011.
“We still see a quite moderate upswing, but it is moving gradually upwards,” Haugland told DN. Ida Wolden Bache at Handelsbanken agrees, predicting mainland economic growth of 2.6 percent.
Most of the economists polled by DN expect the unemployment rate in Norway to remain low, at around 3.6 percent, while incomes will rise by between 3.4 and 3.7 percent and private consumption will rise by around 3.5 percent.