Norwegian GDP grew robustly in Q2, but activity will slow from here

The Norway mainland GDP forecast has been raised 0.5ppts to 3% following a slight growth surprise in Q2 and a revised smaller contraction in Q1. GDP rose 0.7% q/q in Q2. Services consumption drove growth but benefitted from a strong positive carryover from March, with monthly momentum flat throughout the quarter.

What you will learn:

• Now that Covid tailwinds have been exhausted, inflation and tightening monetary policy will dominate the outlook over H2 and into 2023, keeping growth subdued.
• Energy inflation has been plateauing over recent months, but low hydropower reserves and poor country connectivity means prices are likely to spike higher over the winter.
• Our 2022 inflation of forecast has been raised 0.6ppts to 6.1%, before falling back to 2.7% over 2023.