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Fast Comment NorwayNorges Bank’s Regional Network: Near-term momentum holding up well, as we expected

  1. Near-term momentum holding up well; mainland GDP hovering around 0.7 pct q-o-q
  2. Well in line with our expectations as well as consensus
  3. Rate hike next week
Near-term momentum holding up well; rate hike next week
Ahead of today’s survey, our assessment was that the mainland economy is maintaining its near-term momentum, despite the ongoing global slowdown. The recently released survey confirms this assessment. Output growth over the past three months is reported at 0.72 percent, and expectations for the next six months is reported at 0.73 percent. We and consensus expected 0.72; the deviation is negligible. The key message is that there are no signs of any change in the current momentum. The mainland economy is in particular supported by rising petroleum investments, feeding through to the supplying industries. Across the other sectors of the economy, output expectations were relatively little changed. One notable exception is the retail sector, where growth expectations were scaled down. But due to increased expectations among said oil suppliers, the overall growth rate (for the mainland economy) is expected to stay fairly unchanged. The current pace is well above the potential for the economy, and as such employment expectations continue to run above the growth rate for the working age population; this implies lower unemployment ahead. Finally, wage expectations for this year is reported at 3 percent. In comparison, Norges Bank’s Expectations Survey has revealed average expectations of 3.1 percent. This is close enough to Norges Bank’s estimate of 3.2 percent. In summary, the report is underpinning expectations of another rate hike from Norges Bank next week.


Disclaimer

Marius Gonsholt Hov

Senior Economist

Norway

maho60@handelsbanken.no

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