- Norwegian economy has turned – OBI Online

Nordea Markets is out with a macro update, noting that the key figures over the summer has been on the strong side.

– The unemployment rate has come down slightly. Less brake oil sector means that mainland growth will gradually pick up. It thus appears that it has turned in the Norwegian economy, writes the brokerage in its latest edition of “Economic Outlook”.

– The time of interest rate cuts over

A sharp drop in oil investments according to Nordea given weak growth in the mainland economy in recent years, but based on the oil companies’ investment plans is the belief that the fall in investment will slow already in the second half of this year.

– it is also good growth in the general economy. The peak is reached for unemployment, and low interest rates and a more subdued inflation will contribute to decent consumption growth in the coming years. Low interest rates also leads to strong growth in house prices and housing construction, it added.

Nordea economists estimate further that Norges Bank has the last interest rate cut behind them, the krone will strengthen forward and that oil prices will rise gradually in the future.

– Norges Bank has had one goal in mind ever since oil prices began to fall in 2014 to prevent a sharp decline in the Norwegian economy. It appears that they have managed the task with aplomb. Although we must expect a somewhat stronger krone ahead, we believe the time of interest rate cuts is over, says chief economist Kjetil Olsen.

This makes Nordea estimates

Compared with the March report jacks Nordea down projected 2016 growth in mainland GDP of 1.0 to 0.8 percent. 2017 growth revised upwards from 1.6 to 1.8 percent, while 2018 growth is still being estimated at 1.9 percent.

Estimated 2016 drop in oil investments be raised from 13 to 16 percent, while brokerage ever envisage a decrease of eight percent next year. In 2018 the expected drop to stop completely, and the expectation is no change from the previous year.

With an assumed lower braking effect of the oil sector, Nordea assumes that unemployment (LFS) has peaked at 4.8 per cent. The vision is that it stays there this year and next year, before falling to 4.6 percent in 2018.

Estimated core inflation for 2016 adjusted upwards from 2.5 percent in March report to 3.3 percent now, but adjusted from 2.5 to 2.2 percent for 2017. in 2018 the expected inflation to come in at 1.5 percent.

Oil analyst Thina M. Saltvedt hold on $ 46 a barrel as estimated the average Brent price in 2016, while the 2017 estimate jacked down from 63 to 62 dollars. In 2018, Nordea assumes $ 67 a barrel.

– Growth drawers, unemployment falls

Global growth continues according to the brokerage to disappoint. Yet falling unemployment in many countries.

– This shows more about weak growth potential than weak demand. The low-rise get much attention, but central banks are more concerned about pressures in the economy and thus on the situation in the labor market, writes Nordea further.

The central banks, according to chief economist Olsen only affect the economic situation and capacity utilization, not growth potential.

– In the US, unemployment halved, from 10 to less than five percent. The market believes the need for rate hikes is very limited. The market’s excessive focus on growth means that they can get to be surprised, he said.