AFP, Oslo :
Falling oil revenues will see Norway delve into its massive sovereign wealth fund-the world’s largest-to balance its books next year, according to budget plans unveiled on Wednesday.
According to the plans, the minority conservative government will need to take out around 3.7 billion krone ($450 million) from the fund, which is currently estimated at some $830 billion.
Prices of crude have collapsed in recent months, cutting Norway’s tax receipts from petroleum extraction activities and dividends by some two fifths, leaving a hole in the 2016 budget.
“We had expected this … to occur later, around 2020. But it has happened earlier thanks to the fall in oil prices,” DNB financial services group economist Kyrre Aamdal told AFP.
“This is a milestone-but it is not of great importance as the fund should continue to grow,” he added.
By the end of next year, the fund-whose role is to pay for future welfare spending and pensions-is set to top 7.449 billion krone (804 billion euros/$904 billion), up from 7.025 billion.
Earlier this year, Norway’s central bank indicated that government transfers to the fund could be threatened once oil prices slid below some $60 per barrel.
Falling oil revenues will see Norway delve into its massive sovereign wealth fund-the world’s largest-to balance its books next year, according to budget plans unveiled on Wednesday.
According to the plans, the minority conservative government will need to take out around 3.7 billion krone ($450 million) from the fund, which is currently estimated at some $830 billion.
Prices of crude have collapsed in recent months, cutting Norway’s tax receipts from petroleum extraction activities and dividends by some two fifths, leaving a hole in the 2016 budget.
“We had expected this … to occur later, around 2020. But it has happened earlier thanks to the fall in oil prices,” DNB financial services group economist Kyrre Aamdal told AFP.
“This is a milestone-but it is not of great importance as the fund should continue to grow,” he added.
By the end of next year, the fund-whose role is to pay for future welfare spending and pensions-is set to top 7.449 billion krone (804 billion euros/$904 billion), up from 7.025 billion.
Earlier this year, Norway’s central bank indicated that government transfers to the fund could be threatened once oil prices slid below some $60 per barrel.
