Norway’s GDP: Decline during the pandemic recouped in 2021

The mainland economy increased by 4.2% from 2020 to 2021. Thus, the decline during the pandemic was recouped in 2021. Preliminary national accounts figures show that GDP for mainland Norway increased by 5.9% from its lowest in March to a preliminary peak in November 2021.

In the fourth quarter, activity in the mainland economy increased by 1.4%. The upswing reflected the reopening of society and was particularly driven by the service industries, Statistics Norway (SSB) writes.

“There were high infection pressure and infection control measures at the beginning and end of the year, but they had less extensive financial consequences in 2021 than in 2020,” section leader for National Accounts at Statistics Norway, Pål Sletten, said.

“In April, the gradual reopening of society began, and activity in the mainland economy grew every month from April to November,” Sletten said.

Rapid rise in oil and gas prices

In both 2020 and 2021, there have occasionally been very high prices for various raw materials, including energy products. For Norway, it has been particularly important that gas prices have risen sharply. As a result, the total GDP for Norway, including oil and gas extraction, pipeline transport, and foreign shipping, increased by 21.5% in current prices from 2020 to 2021.

“In 2021, we had the highest growth in nominal GDP in several decades, higher than during the oil price shocks in the 1970s,” Sletten said. The main reason is a sharp rise in crude oil and gas prices.

Increased electricity costs

The value of oil and gas exports increased by more than NOK 500 billion from 2020 to 2021, to a historically high level. The trade balance with other countries was significantly strengthened.

A new feature in 2021 was that international energy price inflation translated into domestic electricity prices. As a result, both businesses and households experienced a significant increase in electricity costs.

Both exports and imports of goods increased last year, which resulted in the largest trade surplus ever in 2021 – at NOK 531 billion.

Measured in fixed prices, exports increased by 1% in December due to an increase in exports of oil and gas. On the other hand, there was a decline in exports of services, traditional goods, as well as ships and platforms.

Source : © NTB Scanpix / #Norway Today / #NorwayTodayFinance

Do you have a news tip for Norway Today? We want to hear it. Get in touch at [email protected]