Norway to spend less from oil fund, finance minister says

OSLO (Reuters) – Norway’s finance minister said on Tuesday that the government will rein in fiscal spending next year to help bring down inflation and keep interest rates in check as the cabinet embarks on a two-day budget conference this week.

“We must do what we can to bring inflation under control,” Finance Minister Trygve Slagsvold Vedum said in a speech.

The cabinet’s fiscal budget conference is planned to take place on Wednesday and Thursday.

The centre-left minority coalition government has vowed to limit the spending from its $1.2 trillion sovereign wealth fund amid a surge in consumer prices and a looming energy crunch.

“We must reduce the spending of oil fund revenue,” Vedum said in his speech.

“We can’t do things in our budgets that increase the upwards pressure on rates.”

The budget proposal for 2023 is due on Oct. 6.

The Norwegian central bank has raised rates faster in recent months than it had anticipated in spring, and has indicated more hikes will follow.

Norway’s key policy rate is currently at 1.75%, up from zero a year ago.

(Reporting by Victoria Klesty, editing by Terje Solsvik)