March 17, 2020 / 1:48 PM / in 14 days

UPDATE 2-Norwegian registered unemployment jumps due to coronavirus

(Adds analyst, detail, background)

By Gwladys Fouche and Terje Solsvik

OSLO, March 17 (Reuters) - Norwegian unemployment is soaring as a result of the coronavirus outbreak and will continue to increase, the Nordic country’s labour agency said on Tuesday, as companies lay off staff to cope with the decline in business activity.

Registered unemployment rose to 5.3% on Tuesday, from 2.3% at the end of February, data from Norway’s Labour and Welfare Agency (NAV) showed. Some 84,000 people became unemployed in a week - an increase of 128%.

“The Norwegian economy and the Norwegian labour market are in a very challenging time ... NAV expects that unemployment will continue to rise,” the agency said in a statement.

The professions hardest hit were tourism and transport (up 299% in a week), services (up 223%), retail and sales (up 171%), accounting for 47,000 of the 84,000 people who became unemployed in the past week.

“We would not be surprised to see a double-digit figure in the near term,” Handelsbanken said in a note to clients. “We expect Norges Bank to cut its policy rate to zero anytime soon.”

The Norwegian central bank cut its key policy rate in an emergency move on Friday by a half-point to 1.0% and is expected to cut it further, describing the Nordic country’s economy as in a “state of emergency”.

Norwegian post-World War Two unemployment hit an all-time high of 5.5% for the full year in 1993. (Reporting by Gwladys Fouche; Editing by Nerijus Adomaitis and Alex Richardson)

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