Oil Report

UPDATE 1-Statistics Norway raises '07 GDP outlook, cuts '08

 (Adds details, quotes, crown rate)
 OSLO, Sept 6 (Reuters) - Norway's state statistics agency
raised its forecast for 2007 mainland economic growth to 5.1
percent from an earlier 4.1 percent, but trimmed its 2008
forecast by three-tenths of a point to 3.1 percent on Thursday.
 Mainland gross domestic product, which grew 4.6 percent last
year, excludes the petroleum industry and ocean-going shipping.
 "Following the cyclical upturn that has lasted for the past
four years, production continued to increase sharply in the
second quarter of this year, albeit at a slower pace than
previously," Statistics Norway said in a statement.
 "The strong growth in production and employment in the
Norwegian economy over the past few years is expected to become
more moderate in the time ahead," it said.
 The economy is into a fourth year of strong growth, driven
by high prices for its oil and gas exports and brisk domestic
demand fuelled by low interest rates, which have nonetheless
risen for two years from record lows.
 Despite the strong expansion, inflation has remained tame,
and Statistics Norway trimmed its forecast for the 2007 rise in
core consumer prices to 1.4 percent from 1.6 percent and its
2008 core CPI view to 1.8 percent from 1.9 percent.
 "Household consumption has risen sharply, but recently there
have been signs that the growth in household consumption will
become more moderate," the statistics agency said.
  The central bank has raised rates 12 times since mid-2005
to 4.75 percent to keep control of the speeding economy and has
said it is likely to raise its main rate to 5.25 percent by
year-end and to a peak of 5.75 percent next year.
 Statistics Norway raised its forecasts for average money
market interest rates in 2007 to 4.8 percent from 4.6 percent
and next year to 5.5 percent from 5.3 percent and said the gap
with euro zone rates would widen and boost the currency.
 "They ... see the interest rate differential against the
euro area increasing, which will put some upward pressure on the
currency," First Securities economist Bjoern Roger Wilhelmsen
said. "So this will tighten monetary conditions sufficiently to
bring economic growth to more sustainable levels."
 The Norwegian crown firmed to 7.8850 per euro EURNOK= by
0859 GMT from 7.8956 just before the forecasts.
 Statistics Norway also raised its projections for investment
in the key oil and gas industry to new records, to 117.5 billion
crowns ($20.20 billion) in 2007 and to 119.2 billion in 2008,
from previous projections of 111.4 billion and 82.6 billion.
 "These two estimates are the highest estimates ever given,
measured in current prices, since Statistics Norway started
collecting estimates in 1985," it said.
 The estimates are based on announcements by companies, and
they tend to rise through the year as companies' plans firm up.
 The petroleum sector accounts for about a quarter of overall
GDP, more than a third of state revenues and slightly over half
of exports in Norway which is the world's fifth biggest crude
exporter and Western Europe's biggest natural gas exporter.
 (Additional reporting by Wojciech Moskwa, Aasa Christine
Stoltz, Ole Petter Skonnord, Joergen Frich and Richard Solem)