Norway may see end of two-year oil-driven downturn: statistics bureau

Two-year oil-driven downturn may come to an end and greater economic growth is expected to take place in Norway, the country's statistics bureau said on Thursday.

"The Norwegian economy will be boosted by the international economy, although the development here is now experiencing much uncertainty."

"Overall, we will therefore see a turnaround to higher economic growth through 2017. In the following years, however, the forces behind the economic development are expected to change markedly," Statistics Norway said in a report.

A reduced decline in investments in the petroleum industry and somewhat higher growth in exports, mainland business investment and consumption are expected to lead to greater economic growth and slightly lower unemployment, it said.

Growth in Norway mailand's GDP has been low so far this year, and as an annual average is expected to be just 0.7 percent, while the trend growth in the economy is projected to be about 2 percent, the bureau said.

Growth is expected to surpass the trend growth early next year. On an annual basis, Norway mainland's GDP may then reach 1.7 percent, and just over 2 percent in the following two years, according to the report.

The current economic downturn has been dampened by interest rate cuts and a weaker Norwegian currency of krone caused by the fall in oil prices. An expansionary fiscal policy has also contributed.

In 2017, the decline in petroleum investment will be curbed, leading to a moderate recovery. Continued expansionary impulses from fiscal and monetary policy will contribute to slightly higher growth in household consumption and business investment.

Developments in the housing market will also have a large bearing on the growth in activity next year, Statistics Norway said.

For 2018 and 2019, the Norwegian economy will likely be boosted by the oil industry, it added. Endit