July 8, 2020 / 6:44 AM / a month ago

UPDATE 1-Norway's economy rebounded in May as lockdown lifted

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OSLO, July 8 (Reuters) - The Norwegian economy rebounded in May after two months of steep decline as a gradual reopening of businesses from coronavirus lockdowns helped turn activity around, Statistics Norway (SSB) said on Wednesday.

Although the mainland economy, which excludes volatile offshore oil and gas production, grew by 2.4% in May from April, it has still contracted 8.9% since February, the agency said.

On March 12, Norway became one of the first nations in Europe to close down social interactions in its battle on the virus, but has lifted many curbs since, with a bounce in retail sales as the pandemic was reined in.

“There was strong growth in May in some of the industries that have been most affected by the lockdown,” SSB said, adding that the reopening of day care centres, hairdressers and other businesses requiring one-to-one contact had provided a boost.

Only nine virus patients were in Norway’s hospitals by Wednesday, down from an April 1 peak of 325, data from health authorities showed.

Many travel curbs remain, however, limiting foreign tourism, and the Nordic country sharply boosted spending from its $1 trillion sovereign wealth fund and slashed central bank interest rates to support the economy.

Both SSB and Norway’s central bank last month revised their forecasts for 2020 gross domestic product, predicting that the hit to the economy would be smaller than originally anticipated. (Reporting by Terje Solsvik; Editing by Victoria Klesty and Clarence Fernandez)

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