Norway's economy will recover quicker than previously thought in 2010 and benefit from record investment in the oil and gas sector next year, Statistics Norway (SSB) said today.

The SSB said mainland gross domestic product (GDP), a measure that strips out the offshore oil, gas and shipping sectors, would rise 2.1% in 2010 after shrinking 1.2% this year.

In May, the SSB predicted a more modest 1% rise in mainland GDP and a fall of 1.4% in 2009, a reuters report said.

Overall GDP is seen up 1.4% in 2010 after a 1.6% contraction in 2009. Forecasts for 2011 are bullish too.

"The dramatic fall in economic activity in Norway and abroad during the winter half of the year is over," the SSB said.

"Growth is expected to gradually recover in the next few years ... (and) the activity in 2011 is expected to recover to such a degree that it can be characterised as an upswing in the economy," the government agency said in a statement.

Norway's economy has held up better than its Nordic neighbours during the global downturn.

With oil prices recovering to $68 per barrel in past months, the SSB said investments in oil and gas activities on the Norwegian shelf would hit a record high in 2010 of Nkr145.4 billion ($23.94 billion).

"The increase is mainly due to higher investments in field development and fields on stream," the SSB said in a statement.

Three months ago it saw 2010 investments at Nkr136.1 billion.

For 2009, the SSB slightly cuts its oil and gas investment forecast to Nkr143.5 billion from Nkr145.2 billion seen in May, Reuters said.