Bad times with high inflation limit the finance minister’s room for action. Despite good state finances, neither households, municipalities nor county councils can count on major additions in the spring budget, which is presented today.
– In this situation, when we have high inflation, to go in with broad investments, then we think that it will lead to the Riksbank raising the interest rate, says Ylva Hedén Westerdahl, who is head of forecasting at the Norwegian Institute of Economic Research.
Lower inflation and halted interest rate increases would instead give the government greater room for action.