Oil and gas exporter Norway says pressures from a weakened energy sector are fading, though no major economic growth is expected. File photo by A.J. Sisco/UPI. | License Photo
March 23 (UPI) -- There are signs that pressure from a declining energy sector is fading, though Norway's economy is not on pace for major growth, the government said Thursday.
The Norwegian government reported this week that preliminary production of oil, natural gas liquids and other products were up 2 percent from January. Total oil production for February averaged 1.6 million barrels and was about a half percent higher than expected.
Apart from Russia, Norway is one of the main suppliers of oil and natural gas to the European market. Nearly all of its offshore production is exported.
Norway's office for statistics reported that, generally speaking, the economy has been in a cyclical downturn because of pressures from the petroleum industry since late 2014, though there are signs of growth for 2017.
"No strong growth is foreseeable for the next four years, nonetheless," the government report read.
Full-year 2016 gross domestic product increased 0.8 percent, its slowest rate since the global financial crises from the last decade. Emerging growth was apparent, however, as fourth quarter GDP increased by an annualized 1.3 percent.
For investments in the energy industry, the government reported declines began before last decade's recession and continued into late 2016 as low crude oil prices curbed spending. Employment in the petroleum sector, meanwhile, is down 24 percent from its peak in early 2014, though declines there slowed down last year.
"The ripple effects of activity in the petroleum industry are substantial, and the reduction in employment in several supplier industries has been correspondingly sharp," the report read. "Our projections show that the reduction in jobs directly and indirectly associated with petroleum sector demand is about seven times the reduction in the petroleum industry itself."
Norge Bank, the country's central bank, this month left its key rate unchanged at 0.5 percent. In a statement of justification, the bank said inflation would be lower than it expected, which implies the Norwegian economy is becoming isolated.