OSLO (Reuters), – Norway’s sovereign wealth fund of $1.2 trillion, which is the largest in the world, said Tuesday that it expects to face difficult market conditions due to inflation and geopolitical developments.

He said that inflation, which was already rising before the conflict in Ukraine, continues to rise, but interest rates remain low and shares prices are high at the moment.

“The geopolitical implications of war are hard to predict but we likely face the most changes for the next 30 years,” Nicolai Tanen stated in prepared remarks before he testified in front of Parliament’s Finance Committee.

He said, “There’s little doubt that there will be growing frictions among superpowers as well as a reverse of globalisation impacting the markets.”

According to him, the Norwegian fund invests its entire assets in foreign bonds, stocks, and real estate, and has no place to hide. It must also manage risk due to exposure to global markets.

Tangen stated, “All of this combined means we have a rough ride ahead.”

Market value of Norway’s wealth fund https://graphics.reuters.com/NORWAY-SWF/lgpdwajadvo/chart.png

($1 = 9.4587 Norwegian crowns)