– The backdrop for next year’s state budget is an economy with prospects for stronger growth and continued low unemployment, writes Finance Minister Trygve Slagsvold Vedum (Sp) in a press release on Monday morning.
When he delivered the financial speech to the Storting two hours later, he repeated the message he and Prime Minister Jonas Gahr Støre (Ap) have used every opportunity to hammer home in recent months: After being hit hard by war, expensive times and increasingly weak purchasing power, most people to feel much better in the future.
– Employees will once again experience real wage growth. The price increase is on the way down. The salary settlement is good. The income tax for those with low and medium incomes is reduced. Welfare in almost all phases of life has been strengthened, and growth in the economy will pick up next year, said Vedum.
People will get better advice, increased safety and security and tax and duty cuts of a total of NOK 17.5 billion if the government’s budget proposal is adopted, according to the proposal. Among other things, it contains modest cuts in the taxation of salary income below NOK 1 million – calculated by the Progress Party to amount to an average of NOK 1 a day.
The fact, countered Vedum, is that income taxation is 10.5 billion less now than in 2021 when the FRP, Venstre and Høyre adopted their budget.
Flash of light
When, according to the Minister of Finance, we should start to see that there are glimmers of light at the end of the tunnel, it is with expectations of new economic growth, but also an increase in unemployment from 2 to 2.2 per cent. The increase is modest and fairly in line with the latest forecasts from economists and researchers at the forefront.
It also seems that motorists will get a little handshake next year. Through several measures related to fuel and use taxes, it appears that the government is loosening its grip somewhat on motorists who still drive on petrol and diesel.
The Ministry of Finance is based on expectations that wages will rise clearly more than prices in the future, and that households’ purchasing power will increase and contribute to growth in the Norwegian economy picking up next year.
– The budget for 2025 makes it possible for the good development we are now seeing in the economy to continue, with increased growth going forward. The government is putting forward a responsible budget, said Vedum in the financial speech.
2.5 per cent of the oil fund
The use of oil money of NOK 460.1 billion corresponds to a withdrawal of 2.5 per cent from the Government’s pension fund abroad – better known as the oil fund. It is significantly lower than last year and well below the action rule’s long-term guidance of an average of 3 per cent of the fund’s value.
Calculated in 2025 prices, the increase is NOK 27.8 billion, the Ministry of Finance stated when the key figures from the budget proposal were released on Monday morning. Unadjusted, the increase in oil money use is NOK 43.6 billion.
When the key figures in the budget proposal were presented on Monday morning, it emerged that the government expects a growth in mainland GDP of 2.3 per cent next year. The estimate for this year is a growth of 0.7 per cent. The government thus expects economic growth that is more than three times as high as this year, and more than twice as high as Norges Bank’s estimate.
The central bank’s forecast for growth in mainland GDP next year is 1.1 per cent.
Gross domestic product (GDP) is an expression of the overall value creation in the Norwegian economy – i.e. how much money Norway has earned overall from goods and services produced during a year.
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