Norway’s economy continued to grow in the first quarter, adding evidence that it remains more resilient to soaring prices and credit costs than the central bank has projected.

Mainland gross domestic product, which adjusts for Norway’s offshore industry, expanded 0.2% from the previous three months, when it grew a revised 0.6%, the statistics office said on Friday. This compares with a median projection of 0.1% increase in a Bloomberg survey of analysts, while the central bank had forecast a 0.1% contraction.

The richest Nordic nation on a per capita basis has so far been steering clear of a recession, with limited fallout from price growth that keeps surprising policymakers and from monetary tightening that started already in 2021 ahead of many other advanced nations. The data is likely to add to speculation that Norges Bank will need to accelerate or extend its rate hikes.

“Growth has been stronger than Norges Bank expected in their March report,” DNB Bank ASA’s economist Oddmund Berg said in a note to clients. “With inflation surprising to the upside earlier this week, a weak NOK lifting the outlook for inflation and wages and the revised national budget contributing to higher activity, the outlook is still for the policy rate to be increased by 25 basis points in June, August and September, reaching a peak rate of 4.0%.”

While policymakers last week signaled another hike in June, in line with the March projection of reaching 3.5% level by the summer, they indicated clear concern over the weaker-than-expected krone. Since then, bets of higher rates have been underpinned by another unexpected acceleration in core inflation and a revised budget that raised spending of Norway’s fossil-fuel wealth and is seen contributing as much as 0.4 percentage points to economic output this year.

Read More: Norway Raises Oil Wealth Spending to Shield Welfare Services

The central bank in March forecast mainland gross domestic product to grow 1.1% for the full year, while projecting the expansion to slow to 0.5% in 2024.

Household purchases of goods and housing investment declined, while business investments and exports grew, the statistics office said. It said the trade in goods was mainly affected by reduced car purchases compared with the fourth quarter when Norwegians rushed to buy automobiles due to tax hikes implemented from January.

“The activity level has been broadly as expected, and the data shows that the economy is gradually cooling down,” Marius Gonsholt Hov, Svenska Handelsbanken AB’s chief economist for Norway, said in a note.

Norway’s larger neighbor Sweden, pegged by the OECD as the worst-performing economy this year in the European Union, managed to avoid a recession in the first quarter. Among Norway’s other regional peers, Denmark’s economy is set to grow 0.5% this year, while Finland’s gross domestic product will probably stagnate, Nordea Bank Abp, the largest Nordic lender, forecast earlier this week.

--With assistance from Joel Rinneby.

(Updates with analysts comments from fourth paragraph.)