Unemployment is about to peak and prospects look brighter for the Norwegian economy from next year, according to figures from Statistics Norway.
The situation for the Norwegian economy is severe, but there is no crisis, Managing Director Christine Meyer said when she presented Thursday to Statistics Norway (SSB) analysis of the outlook for the Norwegian economy.
The crisis in the oil sector affects Southern and Western Norway hard, but things may be about to turn around. Oil prices are assumed to pick up gradually to 50 dollars a barrel in 2019, while the decline in oil investments will dampened somewhat in times ahead. Unemployment is expected to peak during the year with an annual average of 4.7 percent, according to Statistics Norway.
However, the great upturn for the Norwegian economy will arrive later than SSB estimated in December. They then predicted that the economic recovery would start after the summer.
– We have delayed this estimate by half a year. It will get a little worse before it gets a little better, SSB researcher Torbjørn Eika says to the news agency NTB.
The reason that SSB now estimates that the recovery will begin in 2017, instead of the second half of 2016 is partly that the krone is expected to strengthen somewhat while the estimates for asylum seekers have been adjusted downwards. Fewer asylum seekers, all other things being equal, reduces the need for increased public spending, which means less stimulation of the economy.
But the projections are uncertain, Eika stressed .
– When we make these forecasts, they have to be based on some assumptions. The immigration has been sharply reduced. It is lower than at the same time last year, when it also was low. But still, we assume that we will get a bigger influx this year than we would get in a regular year.
The projection period from 2017 to 2019 will be characterized by a cautious economic upturn. But workers can not expect fat pay increases next year, although prospects are better than for this year.
– We will still be quite deep in a recession. The bright side is that things are going better, but there will no fat, said Oak.
The reasons why things will turn around for the Norwegian economy during the year are, according to Statistics Norway,a rise in export markets, weak krone, a slight increase in oil investments, low interest rates, increased investment in the mainland economy and an expansionary fiscal policy.
Source: NTB scanpix / Norway Today