Norway economy shrinks 2.5 percent in 2020 despite pandemic

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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‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers.