Vedum: The Ukraine crisis is not good for the Norwegian economy

Photo: Terje Pedersen / NTB

The instability that the war in Ukraine generates is not good for a small, open economy like the Norwegian one, Minister of Finance Trygve Slagsvold Vedum (SP) said on Friday.

Both Russia and Ukraine are major exporters of wheat, and the war could drive up prices, Norwegian Broadcasting (NRK) writes.

The prices of electricity and petrol are also rising, and this could affect the Norwegian economy. Vedum emphasizes, however, that Norway is in good condition to deal with the situation.

“We have good government finances, trust in each other, and we are a very well-functioning country,” he told the channel, highlighting the Oil Fund, which he believes gives Norway a special kind of security.

Oil Fund

The war has negatively affected several global stock markets, and such a decline in the global stock market could affect the Oil Fund.

“In the short term, this leads to a lower value. We have seen this so far this year, that the value of the Oil Fund is down 7-8%,” Oil Fund manager Nicolai Tangen told NRK.

He believes the war will exacerbate the problem of inflation and thus hit the world economy. On the other hand, he believes Norway will benefit a lot from the high oil and gas prices.

The price of oil surpassed USD 100 a barrel for the first time in almost eight years on Thursday.

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

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