Norwegian economy not out of woods yet / News / The Foreigner

Norwegian economy not out of woods yet. Unemployment rising, spending falling. Signs of a recovery in the country’s economy will not be seen this side of the summer holidays, according to Erik Bruce, Nordea’s chief financial analyst in Nordea Markets. “There is nothing in the figures that suggests that production is falling at a shallower rate than before”, he tells Dagens Næringsliv (dn.no).

norwegian, central, bank, interest, rates, cut, cautious, recovery, nordea, unemployment, spending



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Norwegian economy not out of woods yet

Published on Sunday, 3rd May, 2009 at 23:16 under the news category, by Michael Sandelson   .
Last Updated on 4th May 2009 at 11:15.

Unemployment rising, spending falling.

Nordea credit card
Nordea credit card
Photo: Nordea Bank ASA


Recovery not imminent

Signs of a recovery in the country’s economy will not be seen this side of the summer holidays, according to Erik Bruce, Nordea’s chief financial analyst in Nordea Markets.

“There is nothing in the figures that suggests that production is falling at a shallower rate than before”, he tells Dagens Næringsliv (dn.no).

He believes that production will continue to fall in the second quarter.

Interest-rate cuts

There have been no signs so far of the effects of the recent large cuts in interest rates either, according to dn.no. Bruce thinks although we’ll see them during the spring and summer, he says he is

“...very unsure as to how strong they will be because of the rise in unemployment and the gloomier economic outlook.”

When they do kick in, the good news may be that households would use it to buy more, thus helping the economic recovery; the bad news is that they may need it as a buffer precisely because of the uncertain economic situation.

Bruce expects consumer spending to rise after the summer; E24.no says that although the level of borrowing has reached its lowest for 11 years, many households are saving because of the low interest rate instead of paying off their debts.

Nordea Markets’ chief economist, Steinar Juel, advises people to dispose of their debts quicker than they are doing at this time instead. 

“When the interest rate rises again, households will still be as far from (paying off their mortgage) as they are at the moment. It doesn’t look as consumers are taking the necessary steps to clear their debts”, Juel tells NA24.no.

Cautious optimism

Bruce does think that there may be an upturn in the Norwegian economy, writes dn.no. He says the downturn in industrial production in Norway will continue to fall, but stabilise itself in the second half of this year..

He is circumspect with his optimism.

“But this is contingent upon the same happening in both the USA and internationally.

The Norwegian Central Bank’s next interest-rate meeting will be on 06 May.



Published on Sunday, 3rd May, 2009 at 23:16 under the news category, by Michael Sandelson   .
Last updated on 4th May 2009 at 11:15.

This post has the following tags: norwegian, central, bank, interest, rates, cut, cautious, recovery, nordea, unemployment, spending.





  
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