Norway Country Risk Report Q2 2015
A sharp slowdown in hydrocarbons sector investment amid a collapsein global oil prices will weigh on Norwegian GDP growth in2015 and beyond.
However, the economic downturn should be limited. The decline inthe Norwegian krone will help boost non-oil exports, and the governmenthas the option of expanding fiscal policy by dipping into thecountry's USD860bn sovereign wealth fund.
The residential housing market has been a major contributor tooverall real GDP growth for most of the past decade, but is set tocool over the next few years.
We envisage broad political continuity to the next election in 2017,with the Conservative-Progress minority coalition government achievingmodest progress on its reform agenda.
- Executive Summary
- Core Views
- Key Forecast Changes
- Chapter 1: Political Outlook
- SWOT Analysis
- BMI Political Risk Index
- Domestic Politics
- Stability To Be Maintained, But Challenges Mounting
- Political risk in Norway has increased modestly since H114, as the Conservative-led minority coalition government faces challenges
- ranging from an economic slowdown to geopolitical risks emanating from Russia. Nonetheless, we continue to envisage broad political
- stability through to the next election in 2017.
- table: Political Overview
- Chapter 2: Economic Outlook
- SWOT Analysis
- BMI Economic Risk Index
- Economic Activity
- Slowdown, But Crisis To Be Avoided
- A sharp slowdown in hydrocarbons sector investment amid a collapse in global oil prices will weigh on Norwegian GDP growth in
- 2015 and beyond. However, the economic downturn should be relatively limited, as the decline in the Norwegian krone will help boost
- domestic non-oil production, and the government has the option of expanding fiscal policy by dipping into the country's USD860bn
- sovereign wealth fund.
- tab le: GDP Con tribu tion To Gro wth
- Currency Forecast
- NOK: Modest Appreciation After Big Rebound
- The Norwegian krone's dramatic oil-related collapse and subsequent rebound has left it around a reasonable level versus the euro, and
- we see a range of NOK8.00-9.00/EUR prevailing for the next two years. Our bias is for modest appreciation versus the euro in 2015, as
- we anticipate there will be fewer Norges Bank rate cuts than are currently priced in.
- table: BMI CURRENCY FORECAST
- tab le: Exchange Rate
- table: Long-Term Macroeconomic Forecasts
- Chapter 3: Operational Risk
- Operational Risk Index
- Chapter 4: Key Sectors
- tab le: Autos To tal Marke t - His torica l Data And Forecas ts
- tab le: Passenger Car Marke t - His torica l Data And Forecas ts
- tab le: Commercia l Vehic le Marke t - His torica l Data And Forecas ts
- Tab le: Motorc ycle Marke t - His torica l Data And Forecas ts
- Other Key Sectors
- Table: Oil and Gas Sector Key Indicators
- Tab le: Pharma Sec tor Key Indica tors
- Table: Telecoms Sector Key Indicators
- Table: Infrastructure Sector Key Indicators
- Table: Defence and Security Sector Key Indicators
- Chapter 5: BMI Global Assumptions
- Global Outlook
- Weaker EMs To Weigh On Growth
- Table: Global Assumptions
- Tab le: Deve loped States , Rea l GDP Gro wtH, %
- Tab le: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWT H FORECASTS, %
- Tab le: Emerging Marke ts, Rea l GDP Gro wth, %