Britain is Norway’s third-biggest destination for goods such as gas and seafood
about 5 hours ago
Updated: about 3 hours ago
Photograph: EPA/Andy Rain
Britain’s vote to leave the European Union could hurt Norway’s exports to Britain and hit the profitability of the Nordic country’s banking, insurance and property sectors, the International Monetary Fund said.
Britain is Norway’s third-biggest destination for goods produced by its mainland economy, which excludes the volatile oil and shipping sector, with an eight-per cent share.
Mainland exports are primarily seafood, including salmon, but Norway is also a major gas supplier to Britain and its $860-billion wealth fund, the world’s largest, is a major foreign investor.
“If a British exit from the EU is accompanied by a significant slowdown in the UK, it could hurt Norway’s exports to the UK,” the IMF said in its annual assessment of the Norwegian economy.
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It added that Brexit could “adversely affect the profitability of Norwegian banks, insurance companies, and real estate companies given their direct and indirect exposures, and may result in deterioration in asset quality”.
Leading Norwegian banks include DNB, SR Bank , Sparebank 1 SMN, Sparebanken Vest and Sparebank 1 Nord-Norge. Its largest insurers are Storebrand and Gjensidige.
The fund recommended that Oslo be prepared to supply liquidity to banks if needed and “redouble efforts to reach new economic cooperation and trade agreements to minimise disruptions”.
The IMF repeated it saw Norway’s mainland economy growing by 1.1 per cent this year and 1.7 per cent in 2017, numbers it had first released in May.
The IMF expects unemployment to reach 4.7 per cent this year and 4.5 per cent next year. By comparison, the Norwegian central bank expects unemployment to reach 4.6 per cent this year and 4.4 per cent next year.