Baku. 12 May. Norway’s government boosted the amount of oil money it will spend this year to a record, dipping deeper into its sovereign wealth fund to ward off a recession.
Report informs referring to the vestifinance.ru, the government will use 205.6 billion kroner ($25 billion) of its oil wealth, up from the 195.2 billion kroner it estimated in October, according to the budget released in Oslo Wednesday. The spending will have a stimulus effect of 1.1 percentage point, which is the most since 2009 and up from 0.7 percentage point in the initial budget.
“A key priority for the government in the current situation is to support growth and employment in sectors exposed to international competition,” Finance Minister Siv Jensen said in a statement. “Tax reform with lower taxes and increased spending on education and infrastructure, is essential in this respect.”
The added spending means the government plans to withdraw 84.2 billion kroner from its 7 trillion kroner wealth fund. That’s up from an October estimate of just 4.9 billion kroner, made before oil plunged at the end of last year, and higher than the 80 billion kroner estimate made by the fund in February. At the same time as spending increases, the government’s cash flow from oil and gas production is expected to drop by almost 40 percent to 132 billion kroner this year.