The Norwegian economy is facing negative effects of the Ukraine war, says the statistics office
FILE PHOTO – A view across the harbor in Stavanger, Norway October 11, 2015. REUTERS/Stine Jacobsen
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OSLO, March 18 (Reuters) – Norway’s economy has recovered from the coronavirus pandemic but is now facing a negative impact from Russia’s invasion of Ukraine, Statistics Norway (SSB) said when it released new forecasts on Friday.
“The war in Ukraine significantly dampens growth prospects for our trading partners in Europe, which in turn has a negative impact on the Norwegian economy,” the agency said.
Norway’s central bank is expected to hike rates four times this year and once next year, reaching 1.75% by the end of 2023, SSB added.
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Gross domestic product (GDP) of the mainland economy, which excludes the country’s oil and gas industry, is now expected to grow 3.6% this year, down slightly from the 4.1% forecast in December, SSB said.
“The forecasts assume that the war in Ukraine will be over in a few months. If this assumption does not come true, the impact on the Norwegian economy could be worse than expected,” the agency said.
Core inflation is expected to rise by 2.1% in 2022, below a previous forecast of 2.5%, while the forecast for 2023 is now 2.0%, higher than the previous forecast of 1.7%.
Wages are expected to grow by 3.6% and 3.8% this year and next, ahead of previous forecasts of 3.3% and 3.5% for 2022 and 2023, respectively.
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Reporting by Terje Solsvik, editing by Nora Buli
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