Open spending tap, economist says

Handelsbanken's chief economist, Knut Anton Mork, says the oil-flush Norwegian state can afford to build more nursing homes, hospitals and schools as well as raise public sector salaries - a point of view that clashes with that of the Ministry of Finance.

According to Mork, officials could hike spending by some USD 7.5 billion (NOK 70 billion) a year without dipping into the state's oil-revenue savings fund. While Finance Minister Karl Eirik Schøtt-Pedersen has criticized such proposals as inflationary, Mork said higher interest rates would hold inflation in check.