Economic Council chair says fiscal framework falls short

The proposed fiscal policy framework is not ambitious enough, Johnny í Grótinum, chair of the Economic Council, told KVF, warning that planned spending growth would add fuel to an already overheated economy.

Grótinum said it was positive that the government was working on a fiscal framework, but argued that the proposal on the table fell far short of what was needed.

Although a one-percentage-point increase in expenditure growth on top of wage growth might not sound significant, it would add further pressure to an economy that was already overheated, he said. Grótinum made the comments in an interview with Ingolf S. Olsen on KVF radio.