Norway exported goods worth ~82 bn in April

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Norway exported goods worth NOK 81.9 billion in April

In April, Norway exported goods worth NOK 81.9 billion, an increase of 20.5 per cent compared with the same month last year. This may lead to an interest rate hike from Norges Bank.


Imports were in total NOK 62.5 billion, up by 42 per cent. This means that the trade surplus was NOK 19.4 billion in April, according to figures from Statistics Norway (SSB).

One of the main reasons for the growth in foreign trade is due to the oil and gas industry.

In 2017 Norway exported goods worth NOK 860 billion, while importing goods for NOK 684.6 billion, providing a trade surplus of 176 billion in 2017.

Crude oil alone was exported for around NOK 22 billion in April 2018, an increase of 15 per cent compared to the same month last year. The reason is the increase in oil prices – Brent crude (North Sea “standard”) – is now sold at NOK 573 kroner a barrel against NOK 442 at the same time last year. A barrel of oil is roughly 159 litres.

Besides oil, there is also an increase in mainland exports. In April 2018 goods were exported worth almost NOK 38 billion, which is an increase of 17 per cent.

Solid growth in the Norwegian economy in the first quarter

The growth in the Norwegian economy continues. Gross Domestic Product (GDP) for mainland Norway saw a growth of 0.6 per cent in the first three months of the year.

That is the fifth consecutive quarter that the growth in mainland GDP is between 0.6 and 0.7 per cent.

According to the National accounts the production of goods – industrial and mining production exempt – increased by 1.2 per cent in the first quarter. This is primarily due to strong growth in electrical power production, traditional fishing and aquaculture. In the construction industry, which has grown a lot in the past two years, growth has come to a halt, according to figures from Statistics Norway (SSB).

In the case of non-governmental service industries, growth was 0.6 per cent, approximately at the same level as the three previous quarters. Here there was a perceptible growth in most areas, with the exception of oil and gas development services.

At the same time, seasonally adjusted figures show that industrial output developed weakly in the first quarter overall, following a sharp increase of 1.7 per cent in the previous three-month period. Oil-related industrial business, such as shipbuilding and metal products, pulled the industrial productionup, while the food industry, oil refining and chemical raw materials production pulled down.

In households, total consumption was unchanged from the previous quarter, when growth was 0.4 per cent. The weak development is explained by a decrease of 1.1 per cent in the consumption of products, mainly because Norwegians bought fewer cars during the first two months of the year.

Everything in place for interest rate hike

– The Norwegian economy is doing well, with 0.6 per cent growth in the first three months of the year. That indicates an interest rate hike after the summer, says economist.

In Danske Bank, it is now viewed likely that Norges Bank (central bank) will increase its policy rate this autumn. Last week, several economists believed that a lowered core inflation could put the autumn’s interest rate hike on hold.

– GDP growth surprised positively Growth is in line with Norges Bank’s expectations. Everything ready for a increase in interest rate “after the summer,” Danske Bank’s chief economist, Frank Jullum, writes on Twitter.

Record low interest rate for two years

Also at Handelsbanken, it is now believed that a lot points to an interest rate hike being decided at Norges Bank’s monetary policy meeting in September.

– A quick comment on Norway: Mainland GDP supports a growth in interest rates in September, writes Handelsbanken on Twitter.

The core interest rate has been at a record low of 0.5 per cent since March 17th, 2016, but Norges Bank maintained as late as two weeks ago the assessment from earlier this year that it will most likely be increased after the summer.

Core inflation is an important factor for setting the interest rate by Norges Bank, but in April that was only at 1.3 per cent. Several economists have pointed out that if the gap between inflation figures and Norges Bank’s preliminary assessments continues to be as large in May, it speaks for postponing the interest rate hike.


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