Bankers Tell Norway’s Government to Gird for Protracted Crisis

(Bloomberg) -- Representatives from Norway’s finance industry warned the government that the economic crisis caused by Covid-19 is likely to be longer-lasting than recent forecasts imply.

Jan Tore Sanner, Norway’s finance minister, said the message from bankers with whom he sat down on Tuesday was that “we must prepare for the economic downturn to last longer than many believed a short while ago.”

Sanner spoke in a phone interview after meeting with the chief executives of DNB ASA, Norway’s biggest bank, and life insurer Storebrand ASA, among other.

Norway, the richest Nordic economy, is gradually lifting restrictions in place since March to limit the spread of the virus. The government is exploring how best to turbo-charge a recovery after spending record amounts of money on emergency packages.

Even so, the risk remains that the “crisis can have long-lasting consequences,” no matter what Norway does, Sanner said. The country is highly dependent on trade and its biggest export, oil, has been hammered by a collapse in crude prices.

“We can’t count on a helping hand from the global economy,” Sanner said. “We’re also affected in Norway by the uncertainty in the oil market, lower demand and not least low oil prices, which has great consequences for the important oil industry and its suppliers.”

Norway’s economy is set to contract 5.9% this year, with a recovery in 2021 likely to be slowed by the oil-price shock and high unemployment, DNB’s research department said in its latest outlook on Tuesday.

“What characterizes the situation we’re in is first and foremost uncertainty,” Sanner said.

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