Press Release

No. 47/98
Date: 21 August 1998

The 1999 budget will be tight

Norges Bank has today decided to increase its interest rates by 1.5 per cent.

The monetary policy to be conducted by Norges Bank is aimed at maintaining a stable krone exchange rate. The Central Bank shall accordingly use its interest rates actively to stabilise the exchange rate.

I am in agreement with Norges Bank’s decision. A stable exchange rate is an important element in the Government’s economic policy, says Finance Minister Gudmund Restad.

Substantial pressure problems in the Norwegian economy will be met by a tight fiscal policy.

A low oil price and the effects of the Asian crisis are major challenges to the economic policy.

As announced earlier by the Prime Minister and me, the Government is preparing a tight budget for 1999. The retrenchment measures will effect the expenditures as well as the revenues of the budget. I shall, however, not comment upon individual items of the budget which is to be presented on 5 October. A tight budget is expected to reduce the pressures on the monetary policy.

Contact: Anne-Sissel Skånvik, telephone +47 22 24 41 09