Omicron’s impact on Norway 2022 growth outlook appears to be mild

We have lowered our mainland 2022 GDP growth forecast by 0.1ppt to 4.2% to reflect the economic impact of the Omicron outbreak at the start of the year. Although Covid cases are still rising, the government has begun to gradually ease restrictions as hospitalisation rates have declined.

What you will learn:

• Mobility data suggest that activity has held up far better this winter than during previous Covid infection waves.
• The partial resumption of alcohol sales in mid-January will boost hospitality, but activity in contact-intensive services will take time to recover over Q1 given high Covid case rates, voluntary social distancing, and staff absenteeism.
• The consumer outlook is holding firm as the savings ratio has further room to normalise, although a protracted period of high inflation means we only expect real earnings growth of 0.5% this year despite a very tight labour market exerting upwards pressure on wages.