Norway's Finance Minister Sees Pickup in Economy Into 2017

  • Says wealth fund can stick through global stock turmoil
  • Cushions are working to give positive effects to economy

Norway Taps Into Sovereign Wealth Fund

Norway’s finance minister said the country still has plenty of tools to protect the economy and predicted a pickup in growth next year amid record stimulus from both the central bank and the government.

“We have a lot of cushions working in the economy,” Siv Jensen said in an interview on Bloomberg Television, citing monetary policy, the weak krone and fiscal policy. “Working together it’s actually giving a positive effect on the Norwegian economy, so we foresee a pickup in the Norwegian economy into 2017. ”

The central bank is widely expected to lower its main rate to 0.5 percent next week as it fights off stalling growth in western Europe’s largest oil exporter. At the same time, the government has this year tapped its $830 billion wealth fund for the first time to cover the loss in oil revenue and declining taxes from offshore petroleum producers.

The central bank, which controls the fund, last month estimated the government may withdraw as much as 80 billion kroner ($9.4 billion) this year.

Jensen said that while the government is withdrawing money from the fund, it’s still expected to grow and can withstand global turmoil. The fund this week reported that its returns were 2.7 percent in 2015, its worst result in half a decade.

“There will always be turmoil in global stock markets but with a long-term perspective you can stick through fluctuations because over time I think we have seen good results,” she said.

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