Norway’s economy grew in January at a much faster pace than expected, showing that the fossil fuel-rich Nordic country is weathering the consequences of rising living costs better than expected.
Continental gross domestic product, which excludes the country’s offshore industry, rose 0.4% from December, when it fell 0.3%, according to Statistics Norway data on Monday. That beat the highest estimate of economists surveyed by Bloomberg, as well as the central bank’s estimate of a 0.2% decline.
Wholesale and retail trade contributed most to the increase, followed by the electricity industry, the statistics office said.
The latest data likely raises bets that central bank policymakers will not rush to cut the benchmark interest rate from the current level of 4.5%, despite the easing of price growth. Even with Norwegians cutting spending, the continental economy continued to defy recession fears, growing 0.7% last year with help from oil and gas sectors that were buoyed by earnings unexpected after European countries imposed sanctions on Russia.
The rosier picture confirms the outlook of Norway’s Finance Ministry, which last week forecast a slightly faster pace of expansion for the continental economy this year, at 0.9%. In December the central bank forecast full-year growth of just 0.1% in 2024.
However, a key central bank survey of business contacts showed last week that economic output is expected to contract by 0.1% in the first quarter, with “virtually unchanged activity” in the first half of the year.