Norway may be in a recession for the first time since the financial crisis in 2008 after an oil price crash added to the threat of shrinking exports.

The government of the largest oil producer in Western Europe, which is also the richest Scandinavian economy, is already seeking ways to best implement incentive measures to tackle the effects of the coronavirus on trade and tourism. But more may need to be done to prevent the potentially more damaging effects of the oil crisis.

“If the economy goes down, it may be possible to spend more money. But we will think again if we do this and how much the measures we are taking now will cost”, said Prime Minister Erna Solberg. She adds that her administration may need to change its budget since October, as allowing for above-average growth is starting to look unrealistic.

Handelsbanken bank has informed its customers that Norway’s economy is likely to start contracting in the next quarter. Norway depends on oil and gas for more than a third of its exports, and economists have panicked, warning that the Norwegian Central Bank will have to cut interest rates next week by 0.5 percentage points compared to the current 1.5% level.

Investors shunned the Norwegian krone on Monday, causing it to fall about 5% against the euro to an unprecedented level in history.

Handelsbanken, Danske, Nordea, and other Scandinavian banks expect the Norwegian Central Bank to reduce its base interest rate by at least 25 basis points at its next meeting on March 19.