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Despite tough energy recovery, Norway's debt decreases

Country's central bank says the worst-case scenario never happened, but struggles remain.

By Daniel J. Graeber
Despite tough energy recovery, Norway's debt decreases
Norway says its government debt hit a low point for the year in the fourth quarter, though lower oil prices still pressuring the overall economy. File photo by Maryam Rahmanian/UPI | License Photo

Feb. 17 (UPI) -- After reporting slight gains in oil and gas sector job prospects, Norway's government said its debt in the fourth quarter was the low mark for 2016.

Norway reported central government debt for the fourth quarter at $61.9 billion, down 13 percent from the third quarter and the lowest point for 2016. Norway's economy was under pressure last year as oil prices hit historic lows, though recovery emerged during the latter half of the year.

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In its latest report, Norges Bank, the country's central bank, said the energy market was still a prohibiting factor nonetheless.

"The most pessimistic scenarios have not materialized so far," Bank Gov. Oystein Olsen said in a statement. "But the fall in oil prices has put a damper on economic activity in Norway, not least in the western and southwestern areas of the country where the oil service industry has predominated in recent decades."

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For Norwegian oil and gas production, the central bank governor said the peak was passed more than a decade ago, though he noted the sector as a whole may have been underestimated. Nevertheless, he said Norway's economy should start adding in more non-oil capacity.

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"We need more legs to stand on," he said.

On the labor front, the government's statistics office reported the number of job openings increased 3.6 percent during the fourth quarter. Gains were reported in the oil and gas sector, though increases were coming off historic lows. Construction and communication trades were among the brighter spots for employment.

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On central government debt, statistics show fourth quarter 2016 was about 6.5 percent higher year-on-year.

Norway is one of the leading oil and gas producers among countries not party to the Organization of Petroleum Exporting Countries and a top supplier to the European economy.

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