“No deal” Brexit could cost Norway 3.8 billion

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According to the Ministry of Finance’s model calculations, a chaotic Brexit without an agreement can have moderate consequences for the Norwegian economy.

The draft state budget for 2020 states that the Ministry of Finance has made calculations that indicate that economic growth in Norway will not be reduced by more than 0.1 percentage points in 2020 if the UK pulls out of the EU without an agreement in place.

This will amount to a cost of around NOK 3.8 billion of expected gross domestic product (GDP) in Norway of NOK 3,781 billion in 2020.

The Ministry of Finance emphasizes that this is a partial analysis that is limited by looking at the isolated consequences of reduced exports from Norway in a scenario where demand in Europe falls due to “no deal”.

The Ministry also builds on calculations from the OECD where it is estimated that the UK’s GDP at “no deal” could be around 2 percent lower than otherwise in 2021. Most of this effect is expected in 2020.

The OECD further estimates that in the eurozone, GDP in the “no deal” could be 0.5 per cent lower in 2021 than it otherwise would have been.

© NTB Scanpix / #Norway Today

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