2023.03.1608:22:00UTC+00Mainland Norway GDP Contracts On Fall In Car Purchases

The Mainland Norway economy contracted in January on a sharp fall in car purchases, Statistics Norway reported Thursday.

Gross domestic product fell 0.2 percent month-on-month in January, in contrast to the revised 0.3 percent increase in December. The pace of decline matched economists' expectations.

Overall Norway GDP also decreased 0.2 percent after a 0.3 percent gain in December.

There was a significant rise in car purchases in December as people wanted to avoid the tax on electric cars that was introduced at the turn of the year, Head of National Accounts, P?l Sletten said.

Data showed that the decline in wholesale and retail trade contributed 0.3 percentage points to the decline in Mainland-Norway's GDP. Energy prices have affected the overall price increases in the economy, but since the peak in August last year, energy goods prices have fallen significantly, said Sletten.

On the expenditure-side, data showed that household consumption decreased 10.7 percent from December, reflecting a sharp fall in car purchases. Meanwhile, government spending gained 0.3 percent.

At the same time, gross fixed capital formation posted a monthly fall of 2.1 percent.

In January, exports and imports decreased 1.3 percent and 3.0 percent, respectively.