OSLO (Reuters) – Norway’s economic growth will ease in the next two years amid a slowdown in global trade and investment that is likely to hurt the country’s exports, the Organisation for Economic Cooperation and Development (OECD) said in a review on Monday.
Facing weak productivity growth and a downward trend in employment among young and middle aged parts of the population, Norway may also in the longer term find it hard to maintain living standards that are among the world’s highest, it added.
The OECD expects Norway’s mainland GDP, which excludes the volatile oil and shipping sectors, to slow to 2.0% next year and to 1.7% in 2021, from 2.5% in 2019, citing diminishing growth in investment and mainland exports.
The forecast is below Statistics Norway’s prediction of 2.4% growth in 2020 and 1.9% in 2021, published last week.
“The global slowdown in trade and investment, together with faltering business and consumer confidence in the euro area, is a risk to Norway’s predominantly European trade,” the OECD said.
While the oil-rich nation is among the top-ranking countries in terms of wellbeing, growth in returns from its sovereign wealth fund is slowing, capping public services expenditure, the report added.
“Continued weak productivity growth, relatively high labour costs, plus weakening labour-force participation are lessening economic capacity to support good outcomes in wellbeing,” the OECD wrote.
(Reporting by Victoria Klesty, editing by Terje Solsvik)