Norway cuts 2022 oil fund spending to $36 billion

OSLO (Reuters) – The Norwegian government on Thursday trimmed its projected fiscal spending for 2022 as it sought to rein in public expenses at a time of rising inflation and interest rates.

The centre-left minority coalition now plans to spend 352.2 billion Norwegian crowns ($35.90 billion) from the country’s $1.2 trillion sovereign wealth fund, down from 355.1 billion planned in January.

Mainland gross domestic product, also known as non-oil GDP, is now expected to rise by 3.6% in 2022, more than the 3.4% predicted in January.

In 2023 non-oil GDP is expected to grow by 2.3%, it said.

Norway’s central bank has raised rates once this year by a quarter percentage point and projects seven more hikes by the end of 2023 to help rein in inflation.

($1 = 9.8100 Norwegian crowns)

(Reporting by Terje Solsvik, editing by Gwladys Fouche)