Greater recession in the Norwegian economy than previous forecasts – E24

After much of the Norwegian economy closed operations in the second half of March 2020 as a result of measures against the crown pandemic, the level of activity in the continental economy has decreased.

Seasonally adjusted figures from national accounts show a decline in continental GDP of 2.1 percent in the first quarter and 6.9 percent from February to March, according to Statistics Norway (Statistics Norway) on Tuesday morning.

Preliminary figures at the end of April showed a decrease of 1.9 percent in the first quarter and 6.4 percent from February to March.

– Harder than anything we’ve seen before

– The decrease in March is more severe than anything we have seen before. The sharp drop in GDP in the first quarter came mainly after March 12, says national accounts chief Pål Sletten in a press release.

The weakest figure seen previously was during the financial crisis, where there was a minus 2.3 percent decline in continental GDP. At that time, however, there was a full quarter of crisis, while this quarter is the last two weeks of March.

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Nordea: getting worse in the second quarter

The decline in continental GDP is mainly due to updated projections for accommodation and catering, as well as for culture, entertainment and other services. Construction also drops slightly more than initially estimated.

Nordea Markets writes in a morning report that the numbers will be worse in the second quarter, but that a gradual opening of the country during the summer will result in increased activity in the second half.

In the revised state budget, which is also presented on Tuesday, GDP for the mainland of Norway is projected to fall 4.0% this year.

DNB chief economist Kjersti Haugland has previously told E24 that it is impossible to avoid a technical recession this year.

A technical recession is when a country’s GDP falls two or more quarters in a row.