Economic outlook, Norway

- The slow recovery continues
• "The economic recovery continues, but the pace is surprisingly moderate in early 2010."
• "The expansionary economic policy and private consumption are still driving the recovery. This will also be the case for the next quarters combined with a contribution from exports."
• "We lower our growth forecast for 2010 to 1.9% from 2.4% due to the disappointing start to the year, while we maintain our forecast for 2011 at 2.6%."
- Consumers still important for the recovery
• "The increase in private consumption has fallen a bit in 2010, but private consumption still grows fairly well."
• "Still, wage growth is strong, inflation is low, and progress in the housing market not least means that this trend will continue over the next quarters."
- The manufacturing industry has started to pick up - but only moderately
• "After a period of stabilisation, industrial production has again begun to grow moderately."
• "The manufacturing industry is kept down - in spite of solid growth in private consumption and a recovery of the global economy - by a high cost level due to solid wage growth."
- Interest-rate hikes at a measured pace
• "We expect that Norges Bank will continue to raise interest rates - but at a measured pace."
• "The next hike is expected in October."
• "We expect interest rates to stand at 2.75% at the end of the first half of 2011."
• "The hikes will be at a measured pace due to a slightly disappointing development in the economy and increased uncertainty due to the debt problems in Southern Europe."
JyskeBank Economic Outlook Norway June2010