Norway Q1 GDP contracts, 2020 seen plunging 5.5%

The Norwegian economy contracted in the first quarter and risks a plunge of more than 5% for the full year as efforts to halt the novel coronavirus outbreak brought many industries to a standstill, Statistics Norway (SSB) said on Friday.

The mainland economy, which excludes the volatile offshore oil and gas production, shrank by 1.9% in the January-March period from the final quarter of 2019, SSB said, adding that the decline in March from February was 6.4%. Invoking emergency powers, the government on March 12 closed a wide range of public and private institutions, imposing the Nordic nation's strongest-ever peacetime restrictions on civilians in order to stop the COVID-19 disease.

"The standstill in the Norwegian economy due to the coronavirus pandemic is unprecedented. The current slump is likely to persist for several years to come," SSB said in a statement. The agency predicted mainland GDP will fall by 5.5% in 2020 as domestic and foreign demand for goods and services declined, more than the 3.6% median prediction in a Reuters poll of economists released on Tuesday.

In 2021, the economy is forecast to grow by 4.7%, SSB said, while the Reuters poll predicted an expansion of 3.4%.