The Norges Bank governor, Øystein Olsen, has warned higher public spending using Norway’s sovereign wealth fund may hamper the economy’s transition away from raw materials.

In his annual address, Olsen pointed out the fund has served the country well, giving Norway a powerful countercyclical tool. Nonetheless, these policies may not be sustainable.

“The offshore oil industry paved the way for wealth gains no future generation is likely to experience,” said Olsen.

Lower oil and gas reserves