Norway economy shrinks 2.5 percent in 2020 despite pandemic

Norway economy shrinks 2.5 percent in 2020 despite pandemic
Photo by Angela Compagnone on Unsplash
As a result of the coronavirus pandemic, Norway's economy contracted 2.5 percent in 2020, a historic setback but a limited one compared to many other countries, official data showed Friday.

The country even saw growth in its gross domestic product (GDP) of 1.9 percent in the fourth quarter, according to Statistics Norway.

“Preliminary accounts show that the downturn in 2020 was somewhat lower than we feared when restrictions were at their peak in March and April,” Pål Sletten, head of National Accounts at Statistics Norway, said in a statement.

“This is, however, still the largest annual downturn measured for the mainland economy since estimations began in 1970, and it is probably the greatest economic downturn since the Second World War,” Sletten added.

The figures are better than those anticipated by the government and the Bank of Norway, and much better than those posted by other European countries.

On Friday, the UK reported a record 9.9 percent contraction to GDP in 2020, while the Eurozone has seen an average loss of 6.8 percent.

Statistics Norway noted that the 2020 figure was somewhat helped by the fact that the year had three more working days than 2019.

Thanks to a combination of factors, such as remote geographical location, low population density and compliance with protective measures, Norway has managed to mostly curb the spread of Covid-19 without a strict containment regime.

Norway’s central bank has cut its key interest rate to zero, and the government has drawn on the country’s huge sovereign wealth fund, the largest in the world, to support the economy.

The figures published on Friday relate to “mainland” GDP, which excludes oil production and maritime transport, an often-preferred indicator for Norway because it excludes the strong cyclical variations of oil prices.

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