Norway will spend less with oil fund, says finance minister

A view of the harbor in Stavanger, Norway October 11, 2015. REUTERS/Stine Jacobsen

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OSLO, Aug 30 (Reuters) – Norway’s finance minister said on Tuesday the government would limit budget spending next year to help reduce inflation and control interest rates as the cabinet begins a conference two-day budget this week.

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

The cabinet budget conference is scheduled for Wednesday and Thursday.

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The centre-left minority coalition government has pledged to limit spending on its $1.2 trillion sovereign wealth fund amid soaring consumer prices and a looming energy crisis.

“We need to reduce spending of oil fund revenues,” Vedum said in his speech.

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

The budget proposal for 2023 is expected on October 6.

Norway’s central bank has raised rates faster in recent months than it expected in the spring, and signaled further hikes would follow.

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

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Reporting by Victoria Klesty, editing by Terje Solsvik

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