The economic development in the next six months will depend strongly on the corona pandemic, according to the Confederation of Norwegian Enterprise (NHO).
On Thursday, The NHO presented its “Economic overview for the fourth quarter” report.
With the corona pandemic as a gloomy backdrop, NHO is now trying to look ahead.
“When the government introduced the “most intrusive measures in peacetime” and shut down the country in March, almost a tenth of value creation disappeared almost overnight, the report states.
The NHO report estimates that value creation will fall by 5.25% in the industrialized countries and 4% globally this year.
According to the report, it is uncertain how quickly the uplifting vaccine news can be turned into a victory over the pandemic.
“Nevertheless, we assume that most of the infection control measures will be phased out next summer,” NHO writes in the report.
Expectations for 2021
However, NHO believes in strong growth in private consumption next year, the report states.
That should lead to economic growth of 2.75% in Norway next year, the report states.
The strict measures that have been put in place have had their price, but the costs have been unevenly distributed.
“There is little doubt that the burdens of the infection control measures have been unevenly distributed,” the report states.
The shutdown has quadrupled unemployment to levels Norway has not seen since the 1930s.
In mid-December, almost 200,000 people are unemployed. That makes up almost 7% of the workforce.
The total budget balance has been weakened by NOK 328 billion this year. The government has used a record NOK 417 billion from the Oil Fund.
“Deficits of this magnitude are not sustainable,” the NHO report notes, adding that the use of oil money must decrease already in 2021.
© NTB Scanpix / #Norway Today