Norway enters recession: official data
OSLO (AFP) — The Norwegian economy has entered recession despite government efforts to offset the impact of the global economic downturn by spending an increased share of oil revenues, official data showed on Tuesday.
Norway’s mainland GDP, which excludes the oil and gas sectors and the shipping industry, shrank 1.0 percent in the three months to March after a 0.8 percent decline in the final quarter of 2008, with recession counted as two consecutive quarterly figures showing a contraction.
Mainland GDP is considered a better indicator of the Scandinavian country’s economic health, since the oil and gas sector represents 25 percent of its economic growth but employs only about one percent of its working-age population.
“Manufacturing production had a turnaround in the second half of 2008, and the decrease in output magnified in the 1st quarter,” Statistics Norway said in a statement.
Statistics Norway also revised its mainland GDP figure for 2008 up 0.2 points to 2.6 percent, a higher figure than other Western economies but a marked decline from the 2007 growth rate of 6.1 percent.
Norway’s total GDP, which includes the oil, gas and shipping sectors, shrank 0.4 percent in the first quarter of 2009 after 0.8 percent growth in the fourth quarter of 2008.
Norway’s centre-right government, faced with fresh elections September 14, plans to spend 130 billion kroner (15 billion euros, 20 billion dollars) from oil revenues to offset the impact of the current financial downturn.
Most of that sum is normally set aside and invested in a state pension fund.
The Scandinavian country plans to spend 3.0 percent of its Gross Domestic Product on measures to stimulate its economy.
Norway can spend more than its fellow European countries with similar plans owing to its large oil and gas reserves in the North Sea.