Why rich Norway can't afford to be complacent

Norway might have built up the world's largest sovereign wealth fund, but it cannot afford to be complacent,the country's finance minister told CNBC.

Market volatility, falling oil prices and a slowdown in global economic growth are all factors that could put the country's economic success at risk, Finance Minister Siv Jensen told CNBC on Friday.

"Despite the fact that Norway has growth in the economy and very low unemployment we are facing the (same) problems as those debated in most European economies – the need for structural reforms, the need to attract solid investments," Jensen told CNBC Europe's "Squawk Box". "All countries are facing the same problems in a veryuncertain global economy."

"I think the signs from the U.S. are good and there is a somewhat positive trend from the euro zone - slowly, slowly, slowly -so I think it's important for us to follow the debate on how to boost investments," she added.

Norway has amassed a vast amount of money due to its oil reserves. In 1990, it set up a sovereign wealth fund that has become the largest in the world, with a market value of $860 billion, according to Norges Bank which manages the fund.

Read more: Oil poses 'bigchallenges' for Norway: Central bank

However, just over sixty percent of the fund is in equities, making it vulnerable to market volatility. In the third quarter of 2014, the fund posted its first negative performance in equities in more than two years, although a positive return on fixed-income investments helped it eke out an overall return of 0.1 percent.

On Friday, Jensen acknowledged that the fund was vulnerable to stock market volatility. However, she defended the fund's "long-term perspective" and said itwas "doing quite well for the years that it has been operating".

Mainland Norway's gross domestic product (GDP) grew 1.2 percent in the second quarter from the first quarter in 2014. The country registered a fall in exports of crude oil in the same period, however, highlighting that it is not immune to tumbling energy prices.

Read more: Iran a 'time bomb' for oil prices

Jensen said the trend in the oil market reinforced Norway's need to focus on investment. "For Norway, it looks good from a short-term perspective, but in a longer-term perspective, we need to make sure that our economy will continue to grow, especially at times like this when oil prices are fluctuating and we are facing decline in oil investments in years ahead."

- By CNBC's Holly Ellyatt, follow her @HollyEllyatt. Follow us on Twitter: @CNBCWorld