Amid the raging coronacrisis, unemployment in Norway has reached levels not seen since the Great Depression. According to the Norwegian State Welfare Agency (NAV), unemployment in the country has increased to 10.9 percent, from just over 2 percent a month ago.
“The development over the past two weeks is unparalleled,” NAV boss Sigrun Vågeng said, pinning the effect on the measures to limit the spread of the coronavirus.
According to Øystein Dørum, chief economist for Norway’s national employers organisation, NHO, this is a solid post-WWII record. Dørum also suggested that Norway’s unemployment rates were now approaching those clocked during the Great Depression of the 1930s.
“These are frightening numbers that unfortunately will probably get worse,” Dørum told the newspaper Aftenposten, offering a glum estimate of 15 percent of Norway's 1.6 million salaried workers, or about one in seven, having already lost their jobs. Additionally, many sole proprietors or small-time operators have seen their businesses go up in smoke over the past two weeks.
According to Dørum, the number of those currently unemployed has “probably reached around 320,000”. NAV's numbers are at bit lower at 291,000, but they only account for those registered at the welfare agency. Still, Dørum suggested a possibility of having a “lost generation”.
To curb the spread of the virus, Norway has resorted to drastic measures such as closing borders and schools and introducing social distancing. A series of relief packages to alleviate the crisis's toll on the economy has been announced. Prime Minister Erna Solberg and Finance Minister Jan Tore Sanner have announced that crisis measures are expected to cost a whopping NOK 280 billion ($26 billion).
According to Finance Minister Sanner, the price tag for the massive bailout is not too high, but rather a good investment in the future.
“I believe these measures are absolutely necessary,” Sanner told Dagens Næringsliv, at the same time suggesting that Norway's economy was well-equipped to handle the crisis.
As a major oil producer, Norway is particularly hard hit by the ongoing price war in the oil market. The Oslo Stock Exchange has plunged over the past month by a full 30 percent, and the Norwegian krone has lost about one-third of its value.