Country Report Norway May 2009

Outlook for 2009-10

• The Economist Intelligence Unit's central forecast is that the present government will continue in power after the election on September 14th, but the three ruling parties need to recover some support before then.
• The global financial crisis should strengthen the position of the current government, allowing it to portray planned increases in public spending as promoting social justice during the economic slowdown.
• In the event of a change of government, the four opposition parties would have only a slim majority and might well be unable to agree on a coalition.
• Norway's economy is partly shielded from weaker global conditions by its large petroleum sector, but the country will not avoid a sharp downturn in 2009. External and budget balances will remain comfortably in surplus.
• Norges Bank (the central bank) is expected to loosen monetary policy further in 2009, following the latest reductions in official interest rates in March.
• The Norwegian krone is expected to regain some strength in 2009 following a sharp depreciation against both the euro and the US dollar in the final months of 2008.

Monthly review

• The latest monthly opinion poll published by the newspaper Dagens Naeringsliv shows the governing parties falling short of a majority. Their support has been undermined by a row with the owner of the Aker group.
• In his speech to the annual conference of the Labour Party, the prime minister, Jens Stoltenberg, staked his re-election hopes on a promise to ensure that Norwegian unemployment remains the lowest in Europe.
• The UN Commission on the Limits of the Continental Shelf has recommended outer limits for the Norwegian northern continental shelf.
• The government has been involved in a dispute with a leading industrialist regarding the purchase by a partly state-owned company, Aker Solutions, of four firms with interests in the offshore sector.
• Manufacturing output declined by close to 4% quarter on quarter in the three months to February 2009, but the fall was much less severe than in the EU.
• There were mixed signals coming from the housing market in early 2009: some indicators suggested that house prices were rising again, while others pointed to continued weakness in the months ahead.
• Inflation eased during the first quarter of 2009, but remains above the EU average. The trade balance was comfortably in surplus at the start of the year.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60
NAICS Code: 52