Norway's unemployment rate soars to above 10pc due to coronavirus, highest since 1930s

• The country's Labour and Welfare Agency (NAV) said registered unemployment had risen to 10.9pc as of Tuesday, up from 5.3pc a week ago and from just 2.3pc at the end of February.
• Norway has confirmed 2,566 people infected with the coronavirus, of whom 12 have died.
• The employees most affected in the last week were sales and retail workers, with unemployment up 151pc.

Tens of thousands of job cuts have been announced every day, although many of the layoffs are expected to be temporary and resulted from companies taking advantage of an emergency scheme to cut the mandatory redundancy notice period to just two days from two weeks.

The country's Labour and Welfare Agency (NAV) said registered unemployment had risen to 10.9pc as of Tuesday, up from 5.3pc a week ago and from just 2.3pc at the end of February.

Private-sector activity outside of the oil industry is expected to contract by between 15pc and 20pc in the near term, the government predicted on Friday.

"The development of the last two weeks is without comparison," NAV chief Sigrun Vaageng said in a statement.

Norway has confirmed 2,566 people infected with the coronavirus, of whom 12 have died.

The Norwegian parliament has approved loans, tax deferments and extra spending of up to 280 billion Norwegian crowns ($25.25 billion) to alleviate the impact of the crisis, while the central bank slashed its benchmark interest rate twice, from 1.5pc to a record low 0.25pc.

The government will pick up the bulk of the tab for redundancy payments, and has also introduced more generous unemployment benefits than usual.

Budget carrier Norwegian Air has said it would temporarily suspend 90pc of its global workforce, while Swedish retailer H&M last week said up to 2,000 of its staff in Norway were at risk of temporary lay-offs.

Companies providing services to the oil industry have also laid off staff after being hit by the slump in oil prices.

"We believe the number of unemployed will continue to rise as strict social-distancing measures limit economic activity," Handelsbanken Capital Markets wrote in a note to clients.

The increase was particularly large at the start of last week however, with numbers easing a bit in the following days, which could suggest the future rise will be more incremental, Handelsbanken added.

Though the government expects the economy to rebound sharply, limiting the 2020 contraction in non-oil gross domestic product to a 1pc fall, brokers DNB Markets said the outcomes may range from a drop of 0.3pc to a precipitous 4pc plunge.

The employees most affected in the last week were sales and retail workers, with unemployment up 151pc, while tourism and transport had seen the biggest jump over the last two weeks combined, NAV said.

Norway's post-World War Two unemployment rate previously peaked at 5.5pc for the full year in 1993, while the peak for any single month stood at around 6pc, according to the Confederation of Norwegian Enterprise (NHO), a business lobby group.

Data on unemployment during the Great Depression in the early 1930s remains incomplete, but academic work in recent decades has suggested a peak of 10-12pc for the overall workforce in Norway.