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Norway retail sales decline as Euro crisis weighs

Europe’s second-largest oil exporter has so far been shielded from a spiralling euro-area debt crisis

Gulf News

Oslo: Norwegian retail sales fell more than estimated in June as consumers reined in spending amid concern that a worsening European debt crisis would slow a recovery in the world’s third-richest nation per capita.

Sales, excluding motor vehicles and petrol stations, fell 1.1 per cent in June, after rising 1.6 per cent in May, the Oslo- based statistics office said in a statement on its website on Monday. Sales were estimated to drop 0.5 per cent in the month, according to a Bloomberg survey of six analysts. Sales increased 7.4 per cent from a year earlier.

Europe’s second-largest oil exporter has so far been shielded from a spiraling euro-area debt crisis. The European Union is the destination for more than half of Norway’s exports. The central bank, which has held its benchmark rate unchanged at 1.5 per cent since March, has signaled it may start raising borrowing costs as early as this year.

“The decline in retail sales in June should not be seen as signaling a similar sharp trend-change but rather as a correction following very solid growth over the first five months of the year,” Erica Blomgren, chief strategist for Norway at SEB AB in Oslo, said in reply to e-mailed questions.

The krone weakened 0.4 per cent against the euro to 7.2968 by 10:58 a.m. in Oslo after reaching a nine-year high earlier this month. The currency also fell 0.3 percent versus the dollar to trade at 5.9345.

“The euro/krone touched new daily highs following the larger-than-expected decline in retail sales,” Blomgren said. “It is also recovering a bit following the large depreciation last week.”