OSLO, Norway, Sept. 24 (UPI) -- Growth in the Norwegian economy is expected to be suppressed for the medium term because of the low price of crude oil, the country's central bank said.
Norge Bank, the country's central bank, said a weakened value of its currency, the krone, could make exports more attractive, though the overall economy is expected to falter and unemployment is projected to rise.
"Growth in the Norwegian economy is likely to remain low for a longer period than projected earlier owing to the fall in oil prices through summer," the bank said in a statement. "Oil investment is expected to fall to a further extent than projected in June, and lower demand for goods and services from the petroleum sector will reduce activity in other parts of the economy."
Preliminary production figures from the Norwegian Petroleum Directorate, the nation's energy regulator, show an average daily production of around 1.9 million barrels of oil, natural gas liquids and condensate. That's about 2 percent less than July.
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The government's statistics office said the decline in investment in the petroleum industry is one of the key factors dragging on the Norwegian economy.
Growth has been slow for most of the year for Norway, with gross domestic product increasing by slightly less than 1 percent for the last four quarters combined.
Norge Bank Gov. Oystein Olsen said the board opted to lower its key policy rate by a quarter percent to 0.75 percent as a result of sluggish growth.
"Growth prospects for the Norwegian economy have weakened, and inflation is projected to abate further out," he said in a statement. "The board has therefore decided to lower the key policy rate now."
Norway is a key oil exporter to European economies, which are emerging slowly from the last global financial crisis. In July, the government's statistics office said total investment in the energy sector for 2016 is estimated at $23.6 billion, a 1.4 percent increase from the estimate for 2015.
