Norway’s centre-right swept to power last night, ousting a centre-left government that couldn’t capitalize on a solidly performing economy which escaped the world financial crisis largely unscathed (uncanny echoes of Australia’s weekend election here). The popular feeling seems to have been that a decade of strong growth was wasted and is now slowing.
Erna Solberg, Norway’s second woman premier, will have to govern with the anti-immigration, anti-tax Progress party which could be problematic. But they seem at one on the need for lower taxes at least.
Solberg also wants to revamp the $750 billion oil fund, the world’s biggest sovereign wealth fund. Changes could include breaking it up and requiring it to start investing in Norway, forbidden until now.
State-owned companies could be partly sold off but change won’t come quickly. The incoming governing parties don’t agree on precisely what they want and the budget is running huge surpluses so there’s no pressure there.
We also get Norwegian inflation data, which have generally surprised on the upside, limiting the central bank’s ability to loosen policy. In June, Norges Bank said it wouldn’t raise rates until late in 2014 and could cut before that.