Nigeria sinks into recession in Q2 on lower oil prices, Norway stalls

Oil exporters have been hit hard by the falling price of the commodity, with the Nigerian economy slipping into recession in the second quarter of 2016 as a result and Norway's growth brought to a standstill.

Nigeria's Gross Domestic Product experienced a second consecutive quarter contraction over the three months to June, sliding 0.38% after a 0.18% drop from January to March.

The Nigerian Bureau of Statistics in Abuja said real growth in the oil sector - which accounts for 8.26% of total GDP - had plummeted at a 17.48% year-on-yaer pace during the second quarter, alongside a 420,000 a barrel a day drop in oil output to 1.69m b/d.

The price of oil had more than halved in the last two years, from $112 per barrel in 2014 to around $50 per barrel at the time of this report.

Constant attacks on oil production sites by militant groups such as the Niger Delta Avengers had only served to compound Nigeria´s woes during this time.

The governnment there played down the latest figures however, finding solace in other areas.

"There was growth in the agricultural and solid minerals sectors... the areas in which the federal government has placed particular priority," said economic adviser Adeyemi Dipeolu.

There was bad news for another oil exporter on Wednesday too, as Norway reported the economy's growth has been stunted by the falling price of oil, with no growth having been recorded in the second quarter.

Petroleum and sea transport activities decreased by 1.4% quarter-on-quarter over the three months to June.

Indeed, the government has said that it may need to tap into its vast pension fund to recover the losses resulting from the fall in oil revenues.

Mainland GDP on the other hand expanded by 0.4% (consensus: 0.3%).

However, economists appeared unworried by the stagnation in Norway, pointing to an expected recovery in Brent oil prices which they believed would eventually stimulate Norway's economy.

Chiara Silvestre from UniCredit Research said that "based on our forecast that the Brent prices will continue to recover, we do not see significant downside risks to GDP growth."

Nonetheless, Silvestre admitted there was uncertainty around the outlook for growth, but high inflation readings reduced the probability that Norges Bank might cut its deposit rate further.