This fossil fuel-rich Scandinavian country topped its highest GDP growth estimates in January

Mainland gross domestic product, which excludes the country’s offshore industry, increased 0.4% from December, when it declined a revised 0.3%, according to data from Statistics Norway on Monday. That beat the highest estimate of economists surveyed by Bloomberg, as well as the central bank’s estimate of a 0.2% drop.

Wholesale and retail trade contributed the most to the increase, followed by electricity industry, the statistics office said.

The latest data is likely to add bets that central bank policymakers won’t rush to cut the key interest rate from the current level of 4.5%, despite price growth easing. Even with Norwegians pulling back spending, the mainland economy has kept defying fears of recession, growing 0.7% last year with the help of oil and gas-linked sectors that were bolstered by windfall gains after European countries have levied sanctions on Russia. 

The brighter picture backs the outlook by Norway’s finance ministry, which last week forecast a slightly faster pace of expansion for the mainland economy this year, at 0.9%. The central bank in December projected full-year growth of just 0.1% in 2024.

Still, a key central bank survey of business contacts showed last week that economic output is expected to contract 0.1% in the first quarter, with “virtually unchanged activity” through the first half of the year.