Oil keeps Norway out of deep recession

Published Feb 19, 2009
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Only the influence of Norway’s oil industry has prevented a dramatic slide into deep recession for the Scandinavian country’s economy, and new numbers show fourth-quarter 2008 ended a weak economic year with a major slow down.

After the value of all goods produced in Europe fell two percent in 2008, oil-rich Norway decided curbing interest rates over three percent was not enough. The government has turned to fiscal policy and a stimulus plan said to be worth 2.3 percent of all things Norwegians will produce in 2009.

The oil industry funding the stimulus is seen buoying Norway until the world economy again wants what Norwegians export. Much of local manufacturing is aimed at oil activity in Norway and the world.

The oil industry has responded to recent Statistics Norway surveys by saying it will spend 1.2 percent more extracting oil and gas and shipping it by pipeline in 2009. The slight increase would be on top of a record 2008 that saw spending hikes of over seven percent.

By 2011, spending in the Norwegian petroleum industry is seen rising again by 2.2 percent before falling off in 2012.

“This (oil industry spending) will limit the production slowdown in the manufacturing industry … but, the slowdown is nevertheless expected to be considerable in 2009,” Stats Norway researchers said in their report..


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