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Norway government secures backing for revised 2022 spending plan
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OSLO (Reuters) – Norway’s centre-left government has secured backing from the opposition Socialist Left Party for a revised fiscal budget for 2022, the parties said on Tuesday.
OSLO (Reuters) – Norway’s centre-left government has secured backing from the opposition Socialist Left Party for a revised fiscal budget for 2022, the parties said on Tuesday.
The minority government will spend the same amount from the country’s $1.17 trillion sovereign wealth fund, Norwegian public broadcaster NRK reported, which was estimated at 352.2 billion in May.
“The most important thing we can do is not increase the use of oil fund money so as not to put pressure on interest rates,” Eigil Knutsen, one of the negotiators of the deal, who represents the ruling Labour Party, told a news conference.
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.
(Reporting by Gwladys Fouche, editing by Terje Solsvik)
A sovereign wealth fund is a state-owned investment fund that manages the country's reserves, typically derived from surplus revenues, to achieve long-term financial returns and support economic stability.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the principal amount. They are influenced by monetary policy and affect economic activity.
Monetary policy refers to the actions taken by a country's central bank to control the money supply and interest rates to achieve macroeconomic goals such as controlling inflation, consumption, growth, and liquidity.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or Producer Price Index (PPI).
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