Norway and Sweden outperformed the rest of Europe in 2013, posting economic growth of 0.7 percent and 1.3 percent respectively, versus a European Union (EU) average of no growth.
The two countries’ relative strength has waned in recent months, however. Norway (which is not part of the EU) posted growth of 0.5 percent quarter-on-quarter between July and September 2014, just above the EU average of 0.3 percent, which Sweden matched.
“This does not mean that there are signs of economic crisis in the two otherwise very strong economies, but growth rates are heading towards the European average and downside risks have increased,” said Bocian.
As Europe’s biggest oil exporter, falling oil prices are weighing on Norway, although its reserves are bolstered by a sizeable sovereign wealth fund.
The Norwegian krone, whose performance is strongly tied to oil prices, has steadily weakened against the U.S. dollar since mid-August last year, and is down around 2.5 percent since the start of 2015—providing a possible spur to exports.
In December, Norway’s central bank cut interest rates in an attempt to deflect the hit from falling offshore investments, lower oil prices and weak growth in Europe.
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