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According to Erik Johannes Bruce, Research Analyst at Nordea Markets, growth in the mainland economy of Norway could temporary slow in Q2 due to weak electricity production.

Key Quotes

“Statistics Norway will publish Q2 GDP figures 23 August at 08:00. We forecast  mainland GDP growth  at 0.3% q/q (2.3% y/y) in Q2 down from 0.6% in Q1.”

“Mainland growth has remained remarkably stable at 0.6-0.7% q/q since the start of 2017. We believe growth at this level will be the main picture also looking ahead. However in Q2 we know electricity production fell strongly due to low rainfall, pulling down mainland GDP growth by 0.3% points in our forecast.”

“We doubt Norges Bank has any drop in electricity production in its forecast from June and if we keep out electricity production our forecast is only marginally on the downside to Norges Bank.”

“All in all we believe the GDP figure will be well in line with Norges Bank’s view. The employment figure might be somewhat on the weak side, but nothing that would change Norges Bank’s view significantly.”

“Norges Bank will hike in September and with the current weak NOK we see the chance for an upward revision of the rate path in the September report to be rather high.”