Norway is struggling to cool its oil- rich economy as accelerating credit growth, Europe’s lowest unemployment rate and a strong currency force the government to limit crude-revenue spending for a second year.“There should be no reason that the budget would increase pressure on Norwegian interest rates and the value of the krone,” Industry Minister Trond Giske said yesterday in an interview. The “overriding goal” for the spending bill was to protect the export industry and competitiveness, he said.Norway is trying to slow its economy and shield exporters from excessive krone gains while Europe struggles to contain its debt crisis. The government and central bank need to prevent what Norway’s financial regulator has warned may develop into a credit-driven housing bubble. The country’s mainland economy, which excludes oil and shipping, will grow 2.5 percent in 2012, more than triple the 0.8 percent pace in neighboring Sweden, according to Nordea Bank AB, the largest Scandinavian lender.The currency of the world’s seventh-largest oil exporter has strengthened 17 percent against the dollar and 24 percent to the euro since the global economic crisis peaked at the end of 2008, spurring imports and hurting exports.Today, the krone weakened 0.4 percent to 7.8332 per euro as of 10:13 a.m. in Oslo. The currency fell 0.5 percent to 5.9535 against dollar.The risk of overheating requires budget cuts that will probably spark “protest” and “loud demands,” Prime Minister Jens Stoltenberg warned in a speech last week at a conference organized by his Labor Party.The government will present the 2012 budget on Oct. 6. Finance Minister Sigbjoern Johnsen has pledged to comply with Norway’s fiscal rule, which caps the use of oil and gas revenue to 4 percent of the nation’s $524 billion sovereign-wealth fund.The International Monetary Fund warned in April that Norway must ensure an oil-price surge doesn’t throw the economy “off track.” Benchmark European Brent crude oil traded at $100.63 a barrel as of 10:06 a.m. today in London, up 6 percent this year. While it has more than doubled in price since the end of 2008, concerns over slowing global growth has pushed the price of the benchmark down by 20 percent since a peak in April.Norway boasts the widest budget surplus of any AAA rated country in the world, even as Europe’s debt crisis shows signs of deepening. The surplus was equivalent to 10.5 percent of gross domestic product last year and will widen to 12.5 percent this year, the Organization for Economic Cooperation and Development estimates.“It has never been so difficult to make a budget as it is right now,” Giske said yesterday in Oslo. “We’ve had the approach that it’s going to be a tight budget and that we have the capacity and possibility to adjust if the crisis escalates.”Saudi Arabia, the world’s largest oil exporter, may have to tap its reserves to fund spending programs after oil prices declined. The central bank’s total assets fell 0.3 percent to 1.93 trillion riyals ($515 billion) in August from July, according to data from the Saudi Arabian Monetary Agency. It was the first monthly decline since February.In Norway, the government in 2009 and 2010 used its oil and gas income to shield the economy from the worst of Europe’s economic turmoil, while the central bank has kept interest rates near crisis lows, underpinning consumer demand. Household debt burdens will reach 204 percent of disposable incomes next year, the highest since at least 1988, the central bank estimates. House prices rose an annual 9.4 percent in August, according to Norway’s Real Estate Brokers Association.The pace of economic growth has fanned krone gains and prompted policy makers to signal they will act to prevent further appreciation. The krone rose more than any other major currency against the franc on Sept. 6, surging 10.2 percent, after the Swiss National Bank’s pledge to cap currency gains forced investors to search for other havens.Two days later, Norges Bank Governor Oeystein Olsen delivered his strongest signal to date that he won’t tolerate such appreciation. Olsen’s assurance to markets that “monetary policy measures will be taken” to weaken the krone have since sent the currency down 3.3 percent versus the euro. The bank has shelved planned interest rate increases.Stoltenberg, in his speech last week, said a strong krone will “jeopardize industrial jobs.”Fiscal restraint may not be enough to cool consumer spending and the economy. House price gains have accelerated this year even as the government lowered the so-called structural non-oil deficit, an adjusted measure of oil revenue spending, to 3.7 percent of the fund this year, down from 4.3 percent in 2010 and 4.5 percent in 2009.Even if Norway sticks to the rule, the amount that 4 percent represents in absolute terms is growing as the oil fund increases in size. The government estimated in this year’s revised budget that the available oil money under the fiscal rule will grow to 241 billion kroner ($41 billion) by 2020, double this year’s 123 billion kroner.“When we present our budget, it will be a tough budget,” Foreign Minister Jonas Gahr Stoere said last week in an interview in Reykjavik. “It’s time now for Norway to cool the economy and not heat it up.”