Norway‘s annual gross domestic product (GDP) measured in constant prices fell for the first time in 20 years. Both GDP and GDP Mainland fell by 1.5 per cent from 2008 to 2009, the national bureau of statistics, SSB, reports.
The downturn in the mainland economy started in the 3r d quarter of 2008 and continued throughout the 1st quarter of 2009. The drop in activity seized in the second quarter, and the last three quarters of 2009 shows a slight increase in economic growth.
From the 3rd to the 4th quarter, the growth in GDP Mainland Norway was 0.3 per cent. Export led industries and wholesale and retail trade contributed strongly to the drop in activity in the beginning of 2009, while business services was the main source of dampened growth in the second half of the year.
“Increased activity in general government contributed positively throughout 2009 and helped offset the downturn in the Norwegian economy,” the Norwegian bureau of statistics, SSB, says in it’s quaterly national accounts report, Thursday.
Increased Goods Production
Value added in manufacturing rose by 1.0 per cent in the 4th quarter, with production of basic chemicals and metals being the main contributors.
A decline beginning in the 3rd quarter of 2008 and continuing throughout the 2nd quarter of 2009 however, led to a fall in manufacturing by 5.8 per cent for 2009 as a whole.
“The decline may be tied to a drop in both domestic and foreign demand. The exemption was record high investments in oil and gas extraction which fuelled activity in parts of manufacturing industries.”
An increase in the production of electricity as well as fishing and fish farming contributed to a growth rate of 0.9 per cent in the production of other goods in the 4th quarter. Reduced activity in construction dampened the growth.
For 2009 as a whole, value added in production of other goods was reduced by 3.8 per cent.
Slowdown In Service Activities
Production in service producing industries fell by 0.1 per cent in the 4th quarter and dampened growth of GDP Mainland Norway. Financial intermediation and business services were the main sources of the negative numbers, while transport industries and wholesale and retail trade contributed positively.
“For 2009 as a whole, growth in service industries dropped by 1.0 per cent, mainly due to a sharp decline in business services, wholesale and retail trade and transport industries.”
Link: Statistics Norway
Protracted, But Moderate Recession
Activity in the Norwegian economy is likely to continue picking up, but no clear upswing is anticipated before the end of 2012. ” Several years of increased unemployment and only moderate wage growth are therefore in the cards,” the Norwegian bureau of statistics writes in a trend analysis.
The financial crisis, which hit with full force in the autumn of 2008, led to a major slump in the global economy and intensified the downturn in Norway. The decline was however limited by strong political intervention in the finance markets and expansive monetary and fiscal policies.
“Both the Norwegian and the global economies have been growing for a while now, but there is not expected to be a strong recovery in the next few years.”
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