PM Støre: The Norwegian economy is doing well – but we need to limit inflation

Jonas Gahr StørePhoto: Ole Berg-Rusten / NTB

The Norwegian economy is doing well and is on its way out of the pandemic, so spending must be limited, Prime Minister Jonas Gahr Støre says.

“The economy is doing well, and is on its way out of the pandemic. It’s happening in Norway and with our most important trading partners,” Støre (AP) said at a press conference outside Klækken hotel in Ringerike, where the government started work on the budget on Monday.

“We are lucky to have a strong economy, but then it means for us who will make the state budget, that we must hold back. We must turn the krone around when we make good investments,” he said.

Støre pointed out that unemployment has fallen rapidly and is now just over 2%.

“The last time it was so low was in the late 80s and just before the financial crisis in 2008,” he said.

Avoid overheating of the economy

Both Støre and Minister of Finance Trygve Slagsvold Vedum (SP) have emphasized that spending must be restrained to avoid overheating the Norwegian economy.

“This will lead to even higher inflation with the need for even higher interest rates. It would increase the expenses of people and companies throughout the country, and we must avoid that,” Vedum said on Monday.

Støre elaborated on that:

“It is this spiral with low unemployment, higher wages, higher prices, higher interest rates, and a stronger krone that we call an overheating of the economy, and which we must avoid,” he said.

According to Støre, secure economic management is common in the government’s economic policy.

“At the same time, we will follow up on what is the core of the Hurdal platform – fair distribution. We will ensure that those who are most vulnerable when we get increased prices for goods have the possibility to handle it.

Defense, emergency preparedness, and refugees

The situation in Ukraine means that Norway must look at three areas with new eyes in connection with next year’s state budget.

“One is our defense – the structure of it and how we emphasize it in the spring of 2022 with the war in Europe, the preparedness in our country, and the fact that we take into account that we can receive many refugees from Ukraine in the municipalities,” Støre said.

“We have the opportunity to achieve this, and it is with that attitude that we go to this budget conference,” Støre said.

The budget conference is scheduled to last until Wednesday afternoon.

“As the situation is, the overriding theme of our talks will be security for the country. Security for people’s finances and secure financial management will be our contribution to getting us through what we are in now,” Støre stated.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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