Norway PM says time for government spending to 'take a step back'

[August 23, 2017]  OSLO (Reuters) - Norway's economic growth will exceed its historical average in 2018, and the government should "take a step back" on fiscal spending, Prime Minister Erna Solberg said on Wednesday.

Norway’s Prime Minister Erna Solberg at the Chancellery in Berlin, Germany June 29, 2017. REUTERS/Hannibal Hanschke

The economy of western Europe's top producer of oil and gas was hit by a sharp fall in the price of crude from 2014 to 2016, but growth has since picked up along with a partial recovery in oil prices.

"It was right to spend more money when that was needed, but now it's time to take a step back," Solberg told a news conference ahead of a two-day government budget conference.

"Next year we expect the mainland economy to grow more rapidly than its historical average," she added.

The annual spending of cash from the country's $975 billion sovereign wealth fund, the world's largest, should stay at three percent or below, Solberg said.

With less than three weeks to go before parliamentary elections, opinion polls show the minority right-wing government and its centrist backers are locked in a too-close-to-call race with the center-left opposition.

(Reporting by Joachim Dagenborg and Camilla Knudsen, writing by Terje Solsvik, editing by Gwladys Fouche)

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