Norway to Phase Out Stimulus to Avoid Krone Gains, Johnsen Says
Norway must remove government stimulus or risk faster interest-rate increases that would strengthen the krone and stifle an export recovery, Finance Minister Sigbjorn Johnsen says
“My main task is to try to prevent fiscal policy putting an extra burden on the krone,” Johnsen, named to the post last month, said in a Nov. 20 interview in Oslo. “The extraordinary efforts of the fiscal policy should be phased out.”
Prime Minister Jens Stoltenberg’s Labor-led government, which was re-elected in September, will breach expenditure guidelines for a second consecutive year after using a record amount of the nation’s $440 billion oil wealth to revive the economy in 2009. The pre-election pledge to spend more came after the world’s sixth-biggest oil exporter, which boasts Europe’s lowest unemployment rate, had already emerged from recession in the second quarter.