Unemployment and the fall in the Norwegian economy have not been worse since the 1930s. But the estimates for the revised numbers are still better than feared, says Ola Grytten.
Grytten, who is a professor of economic history at NHH, says during peacetime one must return to The Depression in 1931 to find a similar fall in gross domestic product of 4 percent, which is the estimate in the revised national budget for 2020.
An expected unemployment rate of 5.9 percent must also be traced back to the 1930s to match, says Grytten.
In order to compensate, the Government is using a record-breaking amount of oil money; a total of NOK 419.6 billion will be spent this year, which gives an extremely high budget impetus of 5.1.
The budget stimulus is a measure of how the government’s economic policy will affect the Norwegian economy.
– You have to go back to 1921 when you had a post-war crisis that was very big in Norway, to find a similar budgetary stimulus. It is very rare that it is so expansive, says Grytten.
Mr. Grytten says that even though the numbers are bleak, they now don’t look as bad as first projected in late March.
– Then GDP fell by 14 per cent in 14 days, and unemployment was up 12-13 per cent. But many have now returned to work. That’s the good news in all this, he points out.
© NTB Scanpix / #Norway Today