Norway's economy down on lower oil prices

OSLO, Norway, March 21 (UPI) -- The low price of crude oil means Norway's economy is the weakest it's been since the global recession, though the situation is not critical, the government said.

"The oil price has plunged, and the Norwegian economy is currently in a clear economic downturn," the government said in a report.

Data gathered by Statistics Norway, the government's record-keeping agency, found total investments in oil, gas, manufacturing, mining and electricity for 2015 were around $28 billion, down 9.4 percent year-on-year. For oil and gas alone, the year-on-year decline was 11.8 percent.

The government said industry investments are expected to remain suppressed through the latter half of the decade, with levels expected to hold at around $22.5 billion for the next few years before a moderate uptick by 2019.

Last year, gross domestic product increased 1 percent for Norway, the weakest since the global financial crisis that started in 2009. In its survey for 2016, the government said the economy was in the grips of a real downturn, through some level of recovery is expected by early next year.

"The situation for the Norwegian economy as a whole is serious, but not critical," the government's report read.

While unemployment was off for industries that rely on oil and gas, the government said there was a degree of leveling as crude oil prices started stabilizing moving into the second quarter. Public spending, meanwhile, should be largely spared from the oil market downturn.

Petroleum investments, nevertheless, are expected to move back to levels seen in 2005. Extraction rates, meanwhile, have increased for the first time since a peak in 2004.

"The industry will remain an important part of the Norwegian economy, albeit to a considerably lesser extent than before," the government's report said.