In the government’s state budget for next year, a budget impulse of 0.5 percentage points is assumed. It is too low, according to DNB, which believes the figure is 0.8.
– All in all, this indicates that the budget is more expansive than the budget figures show, and that Norges Bank has underestimated the fiscal impulse, concludes DNB in its morning report on Thursday.
– This strengthens our belief that there will be no interest rate cut before March next year, even if inflation should come out a little lower than Norges Bank estimated, it says further.
– Not applicable to make changes
NTB has been in contact with the Ministry of Finance, which responds as follows:
– The structural, oil-corrected deficit is used as a measure of the use of funds from the Government Pension Fund abroad (SPU) over the national budget, in line with the action rule. The so-called budget impulse shows the change in this deficit from one year to the next, measured as a share of trend GDP for the mainland economy, and expresses the phasing-in rate of funds from the SPU over the budget, writes the ministry.
– It has not been relevant to make changes to the fiscal policy framework as a result of us recording dividends from SPN as income, the ministry writes further.
Right: – It is serious
The calculations from DNB cause Conservative deputy leader Tina Bru to react strongly.
– It is serious if the Storting has received incorrect information about how the budget affects our economy and, secondly, the interest rate. If DNB is right, in the worst case, the turning point for people’s finances Støre and Vedum have talked about up on inhalation and exhalation could be pushed further in time, says Bru to NTB.
– It will be very bad news for people struggling with high interest rates and increased costs, she continues.
Bru demands that Finance Minister Trygve Slagsvold Vedum (Sp) respond to the objections from DNB’s economists.
Important number
DNB points out that Norges Bank assumed a fiscal impulse of 0.3 percentage points in its monetary policy report from September. In the government’s state budget for next year, the impulse is estimated at 0.5 percentage points.
Adjusted for the transfers from the National Insurance Fund, however, the budget impulse would have been 0.8 percentage points, DNB believes.
The budget stimulus is one of the most important figures in the national budget. It helps to explain whether the use of oil money helps to slow down or give gas to the economy.
User of the national insurance fund
The government has proposed to use NOK 11.7 billion from the national insurance fund in next year’s budget. The transfer is unlikely to have an effect on the activity, DNB states. Since this is a new transfer to the budget, the fiscal impulse – measured by the structural, oil-corrected deficit as a share of mainland GDP – will underestimate how expansive the budget is for 2025, DNB argues.
– Then the distance to Norges Bank’s estimate of 0.3 per cent starts to become clear, the bank writes in its morning report.
DNB concludes that the size of the model-calculated impulses from the Ministry of Finance indicates that the same activity effect has been assumed for the transfers from the National Insurance Fund as for other income increases.
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