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10 Sep 2015
Norway: Near-term outlook weakened due to lower oil prices - IMF
FXStreet (Mumbai) - The International Monetary Fund (IMF) noted downgraded its near-term outlook on Norway on the back of lower oil prices and an ongoing slowdown in offshore investment, while risks in the housing and financial sectors present a challenge.
It predicts that GDP growth will slow down to 1.3% in 2015 due to weaker private investment and consumption affected by higher unemployment.
Key Quotes:
The IMF urged "vigilance and prudent policies" to ensure further growth and safeguard financial stability. The Fund also stressed the need for reforms aimed at raising productivity and transition away from the "oil-dependent growth model."
"The near-term outlook has weakened due to lower oil prices."
"Looking further ahead, the medium and longer term presents challenges of managing a transition away from the oil-dependent growth model. With oil investment expected to decline further, resources need to shift from supplying the oil and gas sector and move toward other tradable sectors or exports of oil-related goods and services."
"Deceleration of global demand or excess oil and gas supply could lead to a protracted period of low oil prices, which would undercut growth through a further reduction in the oil-related demand for mainland goods and services.”
“A significant reduction in property prices could also occur, which could depress private demand. In addition, there is the risk that the expected decline in oil-related output in the mainland economy would not be offset by a pick-up elsewhere in the mainland economy."
It predicts that GDP growth will slow down to 1.3% in 2015 due to weaker private investment and consumption affected by higher unemployment.
Key Quotes:
The IMF urged "vigilance and prudent policies" to ensure further growth and safeguard financial stability. The Fund also stressed the need for reforms aimed at raising productivity and transition away from the "oil-dependent growth model."
"The near-term outlook has weakened due to lower oil prices."
"Looking further ahead, the medium and longer term presents challenges of managing a transition away from the oil-dependent growth model. With oil investment expected to decline further, resources need to shift from supplying the oil and gas sector and move toward other tradable sectors or exports of oil-related goods and services."
"Deceleration of global demand or excess oil and gas supply could lead to a protracted period of low oil prices, which would undercut growth through a further reduction in the oil-related demand for mainland goods and services.”
“A significant reduction in property prices could also occur, which could depress private demand. In addition, there is the risk that the expected decline in oil-related output in the mainland economy would not be offset by a pick-up elsewhere in the mainland economy."