A sharp fall in petroleum investment will burden the Norwegian economy and keep the economic growth for next year. It think Nordea Markets, which on Thursday presented its budget outlook for 2017.
Norway controls the definitely of better times, but it will first and foremost be felt in 2018, is the message from Nordea-analysts.
They have projected that petroleum investment will fall further with the powerful twelve per cent in 2017. DNB Markets estimated ten percent drop in their 2017 forecasts on Wednesday.
But the new rate cuts are hardly on the menu: Nordea Markets points out that the new boliginvesteringer will contribute to growth, and “maybe almost” offset the negative effect of investeringsfallet in the oil industry.
– It provides a relatively stable outlook. Norges Bank is unlikely to fire up under an already glovarmt housing market by lowering interest rates further, writes Nordea team.
Stronger-than-expected
Both house prices and building activity on the mainland is growing stronger than they had seen for themselves. But it also makes the fall in petroleum investment.
DNB Markets alerts new oljesmell in 2017.
Still, the current downturn is not quite as steep as in years and there is reason to believe that the bottom is reached in 2018, writes Nordea Markets.
They believe the main picture of the Norwegian economy is little changed.
– the Growth will gradually pick up and enough to keep the unemployment rate stable.
like with DNB Markets believe Nordea Markets that the Norwegian GDP growth will reach well up, but from a lean level: From the estimated 0.7 per cent growth in the year to 1.7 per cent in 2017.
See no imminent ledighetsnedgang
In spite of that growth something to come, we look not for any imminent decline in the unemployment rate. With no better prospects on the labour market will growth in employment take up, but it will presumably also the growth in the labour supply.
They estimate a ledighetsrate in 2017 on the 4.8 per cent, the same as in the year.
Regional networks: the Production increases – but not for oil suppliers
Persistent oljebrems will also give moderate wage, believes Nordea Markets. With the weakening of the crown – and importørenes subsequent price adjustments – suggests that the inflation rate will drop “markedly”, they believe.
The underlying inflation is projected at 2.1 per cent, down from 3.2 per cent in the year.
– rate cuts sits far inside
It could be counted for that governor Øystein Olsen making even a peel in the base rate. But it think they are not going to happen. They provide supported by two main arguments:
OIL-DIVERTER: Norges Bank have indicated that low inflation as a result of low wage growth is than the inevitable consequence of a desired transition in the aftermath of the oljenedturen.
HOUSING:, in Addition, a new rate cuts fire up house prices further, after a bonanza year with tolvmånedersvekst of around 12 per cent.
– That house prices are rising far more than the required also helps that a rate cuts sits far inside, writes Nordea Markets.
One could never have anticipated an increase in interest rates to guage boligprisveksten, but this will also mean they:
– With the low interest rates in the eurozone will an increase in interest rates give a strong crown and it will also be difficult to justify in a world with relatively weak growth and low inflation.
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