Fresh economic data confirmed on Thursday that Norway's booming, oil-charged economy has reached its peak after nearly five years of strong growth, casting doubt on expectations of further interest rate increases. Private consumption grew less than expected in April, retail sales figures showed, and registered unemployment fell less than forecast in May from already very low levels.
"After almost five years of strong growth in the Norwegian economy it now seems that the cyclical peak is behind us," Statistics Norway said in a statement with a fresh quarterly forecast for the economy. It raised its forecasts for mainland GDP growth this year and next, but the estimates of 2.9 percent for 2008 and 1.9 percent in 2009 still show an abrupt slowdown after growth of 6.2 percent last year, which was the fastest pace in 36 years.
"Weaker growth impulses from abroad and lower household demand contribute to the slowdown whereas a continued increase in demand from the petroleum industry and public sector dampens the decline," the state statistics agency added.