Norway: The Transition from Oil and Gas

By IMF colleague: Giang Ho

“As offshore investment drops from its peak and oil prices retreat from their high in 2014, the Norwegian economy is going through a transition away from oil dependence,” according to an IMF report. “The transition from oil and gas is a gradual process, and more time would be required before a credible assessment can be made of its progress. The preliminary data show an ongoing marked decline in oil-related production and investment, whereas activity in the traditional goods sector is holding up but not sufficiently to pick up the slack. The divergent performance is perhaps most pronounced within manufacturing between oil-related industries (i.e. machinery and equipment, ships, boats and oil platforms) and nonoil industries. Overall, although the real value added share of the oil-related sector has shrunk from over 36 percent on average during 2000–13 to about 29 percent during 2014–15, much of this appears to have been picked up by the business services sector. The traditional goods producing sector remains a relatively small part of the economy, with value added share at a little over 7 percent and hours worked share declining to 11 percent.”

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Posted by at 9:02 AM

Labels: Energy

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