June 9, 2020 / 8:33 AM / a month ago

UPDATE 1-Norway c.bank survey shows sharp decline in business activity, investment

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OSLO, June 9 (Reuters) - Norwegian companies have sharply cut their investment plans because of the coronavirus outbreak and a subsequent decline in the price of crude oil, the country’s main export, a central bank business survey showed on Tuesday.

“The COVID-19 outbreak and containment measures have led to a sharp fall in economic activity this spring ... Contacts expect a broadly unchanged activity level over the next half-year,” Norges Bank said.

The survey comes ahead of the central bank’s monetary policy meeting scheduled for June 18.

“The decline is most pronounced in household services, but activity has also fallen substantially in commercial services, oil services and retail trade,” Norges Bank said.

In some sectors the fall was so sharp it was difficult to measure.

“There is therefore reason to believe that the real fall in output is greater,” Norges Bank said.

Last month, the central bank cut its key policy interest rate to a record low zero percent and said it may keep it at that level for several years.

But statistics Norway said on Friday the economy could recover somewhat faster than it had predicted only six weeks earlier as the country got on top of the outbreak early and is now rapidly opening up. (Reporting by Terje Solsvik, editing by Victoria Klesty and Nick Macfie)

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