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Nordic economies expected to feel pinch of global trade tensions: Reuters poll

Published 07/17/2019, 03:16 AM
Updated 07/17/2019, 03:21 AM
© Reuters.  Nordic economies expected to feel pinch of global trade tensions: Reuters poll
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By Stine Jacobsen

COPENHAGEN (Reuters) - Nordic economies are seen expanding at a slightly slower pace next year as lingering tensions between the United States and its trading partners hurt world growth, despite growing signs of a global monetary policy easing cycle, a Reuters poll found.

"These are countries orientated toward trade so lower growth in the global economy will inevitably mean lower growth in the Nordic economies," said Nordea's chief economist Helge Pedersen.

Sweden's economy has topped the region's growth league for more than half a decade but growth in its gross domestic product is now seen dropping from 1.8% this year to 1.6% in 2020, lower than the 1.7% previously forecast.

It is seen bouncing back to 1.8% in 2021.

Norway is expected to be the fastest-growing Scandinavian economy both this year and next, while Denmark, the final member of the Scandinavian trio, is seen expanding at a slightly slower pace.

"Norway is least exposed because they have their oil," Pedersen said. "As long as the oil price is above $40 per barrel, investment activity will remain high."

Brent crude futures (LCOc1) traded at around $66 a barrel on Tuesday.

Norway's mainland economy is seen growing 2.3% this year followed by 1.8% in the two following years. Denmark's GDP is seen slowing from 1.7% in 2019 to 1.6% in 2020.

Mainland, or non-oil, growth excludes oil and gas output but includes the indirect effects of the petroleum industry's cyclical swings.

As a major producer of oil and gas, the Norwegian economy slumped following the 2014 crash in energy prices, but has since picked up speed as the price of crude gradually recovered.

(Polling by Hari Kishan and Sarmista Sen; Writing by Stine Jacobsen in Copenhagen and Esha Vaish in Stockholm; Editing by Jonathan Cable and Frances Kerry) OLUSECON Reuters US Online Report Economy 20190717T071501+0000

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