OSLO (Reuters) – The Norwegian economy slowed more than expected in the fourth quarter, confirming recent signs of weakness, and putting pressure on the crown currency on Friday.
Norway’s mainland economy, which excludes the volatile oil sector, grew by 0.2% in the October-December quarter, Statistics Norway said, while analysts in a Reuters poll on average had expected an increase of 0.3%.
Third-quarter growth was meanwhile revised down to 0.6% from the initially reported 0.7%.
While Norway for much of 2019 defied the weakness seen in other European economies, it has more recently shown signs of succumbing to the weakness found abroad.
The country’s central bank raised interest rates three times last year, and the country’s oil industry, a major source of growth in recent years, has signaled its recent investment boom will gradually end.
The fourth quarter reading also lagged the central bank’s own forecast for 0.4% growth.
The central bank shifted in September to a neutral outlook for interest rates, predicting monetary policy would stay on hold for several years as growth is set to slow.
Manufacturing output for December, which was released separately, was stagnant compared to November, SSB said, while analysts had expected an increase of 0.3%.
“If anything, this makes us even more certain that interest rates have peaked,” Handelsbanken wrote in a note commenting on the GDP and manufacturing data.
Norway’s crown currency fell on the news, trading at 10.1325 to the euro at 0733 GMT against 10.1170 just ahead of the 0700 GMT release.
(Reporting by Terje Solsvik, editing by Gwladys Fouche)
