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Norway Country Risk Report Q1 2019

Norway Country Risk Report Q1 2019

Business investment and consumption will drive Norwegian real GDP growth in 2019-2020, as higher oil prices continue to buoy the economy We continue to expect a bifurcation in fixed capital formation, with non-residential investment picking up the baton from weakening residential investment

Divisions within Norway's ruling coalition since the September 2017 election, and inconsistent support from the centre-right Christian Democrats, have nega-tively affected the government's stability and degree of control over policy

Key Risks

We have lowered our 2019 and 2020 real GDP growth forecast to 2 0% and 1 8% respectively, from 2 3 and 1 9% previously, on account of improving leading indicators

We forecast average krone/euro exchange rates of NOK9 45/EUR in 2018 and NOK9 10/EUR in 2019, which are stronger than our previous forecasts of NOK9 35/EUR and NOK8 80/EUR in those years respectively Norway Country Risk Q1 2019


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Cyclical Upturn Nearing Its Peak
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES, 2016
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
NOK: Strength Driven By Rate Hikes, Not Oil Prices
10-Year Forecast
The Norwegian Economy To 2027
Past The Worst, But Painful Transition Ahead
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Risks To Government Stability To Persist
TABLE: POLITICAL OVERVIEW
Norway Country Risk Q1 2019THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.ContentsLong-Term Political Outlook
Stability Still The Core Scenario
Global Macro Outlook
Inflation And Policy Risks Rising
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: NORWAY – MACROECONOMIC DATA AND FORECASTS

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