Oct. 26 (UPI) -- The general outlook for the oil- and gas-rich economy of Norway hasn't changed so lending rates will stay the same, the head of the central bank said.
Norge Bank, the country's central bank, said Thursday the economy was struggling to pick up the pace, with inflation expected to stay below 2.5 percent over the next few years. Though the labor market is gaining strength, the value of the currency, the krone, is weaker than expected and the bank said it was keeping its key policy rate at 0.5 percent.
"The outlook and the balance of risks for the Norwegian economy do not appear to have changed substantially since the September report," Governor Øystein Olsen said in a statement. "The executive board therefore decided to keep the key policy rate unchanged at this meeting."
Olsen early this year said oil and gas production for Norway peaked more than a decade ago, though he added that the sector as a whole may have been underestimated. Nevertheless, he said Norway's economy should start adding in more non-oil capacity because it needs "more legs to stand on."
Statistics Norway, the government's record-keeping agency, reported taxes on the extraction of petroleum for September were down 7.1 percent from last year. Christopher O. Hansen, a staff member at the agency, told UPI that the trend lower was a reflection of market conditions. Oil and gas prices were high, relatively speaking, through a three-year period ending in 2014, but then dropped considerably. Conditions have improved since early last year, though the market is still more or less suppressed.
Norwegian energy company Statoil, which is partially owned by the government, reported adjusted earnings after tax for the third quarter at $2.3 billion, more than double the amount from the same period last year.
President and CEO Eldar Sætre said that, even as the price of oil during the quarter stayed near $50 per barrel, his company was still generating positive cash flow.
"This has further strengthened our financial position," he said in a statement.
The Norwegian Petroleum Directorate reported lower sales and lower production, based on preliminary data for September. Preliminary data show oil production was 1.44 million barrels of oil per day, which was about 11 percent lower than expected.