Norway's mainland economy expanded more slowly than expected in the third quarter, dragged down by the knock-on effect of lower investments in the oil industry, data showed on Tuesday. Excluding the offshore oil and natural gas sector that accounts for about a fifth of GDP, quarter-on-quarter growth was 0.2 percent, Statistics Norway (SSB) said, missing analyst forecasts for 0.3 percent.
"A continuously weak development in industry is pulling (growth) down, and remains affected by the downturn in oil," said Nordea Markets economist Erik Bruce. Including oil and gas, the economy contracted by 0.5 percent, far short of forecasts for unchanged growth compared to the second quarter.
Overall GDP is a volatile number, however, and thus not used for policy making, and the weaker-than-expected data did not change market expectations for the central bank to keep interest rates steady at its December 15 meeting, economists said. Unlike other oil-reliant economies including Russia or Saudi Arabia, the overall impact of the crude price fall is set to be moderate in Norway as the budget mostly uses the returns of already saved up oil wealth, not current year revenues, limiting the fiscal impact.
Norges Bank had predicted mainland growth of 0.4 percent in the third quarter. The central bank and the government both estimate growth will slow to 1.0 percent this year from 1.1 percent in 2015. Second-quarter mainland GDP growth was confirmed at 0.4 percent. "The decline in value-added in manufacturing and mining, which has lasted since the beginning of 2015, continued in the third quarter," SSB said, adding that there was increased activity in food and commodity-based industries.
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