Public spending on migrants to boost Norway's economy - statistics agency

  • World
  • Thursday, 03 Dec 2015

OSLO (Reuters) - An extra billion dollars spent on the tens of thousands of migrants arriving in Norway this year will stimulate the economy although increased public spending would need to be reined in at a later point, the statistics agency said on Thursday.

Some 35,000 people seeking protection are expected to arrive this year, triple the number it was last year, leading the government to raise its 2016 budget spending forecasts by some 9.5 billion crowns (736.66 million pound) in October.

"We estimate that mainland GDP will be about 0.2 percentage point higher next year because of the arrivals of asylum seekers," Statistics Norway head, Christine Meyer, told a news conference.

"The deciding factor (for future spending) will be how well integration (in society) will work. Good integration will be beneficial the Norwegian economy in the years ahead," she said.

The agency revised its forecasts upwards for mainland GDP on Thursday, excluding the volatile retail and oil sectors, to 1.5 percent in 2015 from the 1.3 percent it saw in September and in 2016 to 2.0 percent from 1.8 percent.

Spending on asylum seekers would lift GDP by 0.24 percentage points in 2016 and 2017 and by 0.29 points in 2018, it said.

The oil-producing nation had one of the best-performing economies in Europe until the halving of crude prices over the last 18 months led to the country's top industry cutting investments and jobs.

However, growth is expected to rebound in the second half of 2016 and grow above trend due to low interest rates, a weak crown, more investments in the mainland and increased exports as well as public spending, the agency said.

(Writing by Gwladys Fouche; Editing by Louise Ireland)

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