The Norwegian economy is booming and public spending needs to be curtailed to prevent interest rates from rising even faster than the central bank expected, according to the country’s finance ministry.
Norway’s GDP, excluding oil production, is expected to grow 3.6% in 2022, slightly lower than estimates made in October at 3.8%.
“Now that the Norwegian economy is growing, we have to restrain budget spending. If we do not, the economy could ‘overheat’ and give rise to even higher inflation and the need for even higher interest rates,” said Finance Minister Trygve Slagsvold Vedum. .
Last year the economy grew by 3.9%, the highest rate in 14 years as it recovered from the pandemic.
“The shortage of manpower is leading to increased pressure. At the same time, the war in Ukraine is increasing uncertainty in the world economy,” the finance ministry said in a statement.
For 2023, estimates speak of GDP growth of 2.5%.
Source: Capital
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