February 27, 2018 / 2:22 PM / in a year

Norway eyes tighter spending as 2019 budget takes shape

OSLO, Feb 27 (Reuters) - Norway will curtail spending from its $1 trillion wealth fund next year as the economy gathers pace and the country prepares to pay the long-term costs associated with an ageing population, Finance Minister Siv Jensen told Reuters on Tuesday.

In power since 2013, Norway’s centre-right minority government has raised spending from the fund by 85 percent to a planned 231 billion Norwegian crowns ($29.52 billion) in 2018, helping the economy recover from a slump in the price of oil.

“Now that I’m preparing the government’s March budget conference, I can safely say that these will be different times,” Jensen of the right-wing Progress Party told Reuters on the sidelines of a labour union meeting.

The annual March gathering of Conservative Prime Minister Erna Solberg’s cabinet sets key priorities for the following year, although details are kept confidential until the autumn.

“We’re undoubtedly headed for tighter times, both because we’ll be phasing in oil revenues at a slower pace and because Norway approaches a time when more elderly people will be supported by fewer workers,” Jensen said.

“That means higher expenses for pensions and healthcare, and will leave less money for other things,” she added.

The government relies however on the small centrist Christian Democrats for a majority in parliament, with which it must negotiate a budget compromise.

“We must carry out necessary changes, and it’s crucial that the government’s measures find support in parliament in the time ahead,” Jensen said. “We have to become smarter at how we spend our money in the public sector.”

The 2019 budget will be presented on Oct. 8. A revised 2018 budget is meanwhile due on May 15.

$1 = 7.8263 Norwegian crowns Reporting by Joachim Dagenborg, writing by Terje Solsvik, editing by Gwladys Fouche

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