Norway's economy grew slower than expected in Q2

Credit: REUTERS/INTS KALNINS

The Norwegian economy grew at a slightly slower than expected pace in the second quarter, while first-quarter data was revised higher, maintaining uncertainty over whether the central bank will continue to raise interest rates.

OSLO, Aug 29 (Reuters) - The Norwegian economy grew at a slightly slower than expected pace in the second quarter, while first-quarter data was revised higher, maintaining uncertainty over whether the central bank will continue to raise interest rates.

Norway's mainland economy, which excludes volatile changes to offshore oil and gas production, grew by 0.7% in the April-June quarter, Statistics Norway said on Thursday, while analysts in a Reuters poll had expected an increase of 0.8%.

First-quarter mainland growth was revised up, however, to 0.5% from 0.3% reported initially.

Defying a global slowdown, Norway is likely headed for the fastest expansion in seven years in 2019 thanks to an investment boom in its oil and gas industry, a weak currency and rising government spending.

The central bank has raised interest rates three times in the last year and has said it may do so again, depending on domestic as well as global economic developments.

Norges Bank in June said its next rate hike would most likely take place in September, but later cautioned that the outlook had been made more uncertain by the risk a global slowdown could soon affect Norway.

Norway's crown currency weakened slightly on the news, trading at 10.0415 to the euro at 0615 GMT against 10.0302 just ahead of the 0600 GMT release.

(Reporting by Terje Solsvik; Editing by Toby Chopra)

((terje.solsvik@thomsonreuters.com; +47 918 666 70))

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