AFP, Oslo :
Norway indicated it will spend more of its oil wealth in 2015 to counter a slowdown of its economy, according to budget plans presented Wednesday.
Next year, the right-wing government plans to spend 163.7 billion kroner (20 billion euros, $25 billion) of oil revenues, which are usually put into a sovereign wealth fund, the largest in the world.
The figure amounts to three percent of the fund, higher than the 2.8 percent used in this year’s budget, but still below the four percent authorised limit.
The extra funds are meant to sustain growth, which expected to slow to 2.0 percent in 2015 from 2.2 percent this year, mostly due to a drop in oil investments.
“Lower demand from the petroleum sector poses a challenge to the mainland economy (excluding offshore oil production),” Finance Minister Siv Jensen said.
“We must ensure that our economy is able to adapt to changing circumstances.”
Unemployment, among the lowest in the world, is expected to rise to 3.6 percent from 3.4 percent this year, according to the government’s forecast.
Including oil revenues-which are usually presented separately in Norway’s accounting-the budget should reach a 178.3-billion-kroner surplus, or 308 billion kroner taking into account the yield of the pension fund.
The fund, which is invested in shares, bonds and real estate outside Norway, should amout to 6,015 billion kroner at the end 2015, compared to 5,545 billion kroner at the end of this year.
The budget proposal, the first financial bill presented by the government since it took office in October last year, plans tax cuts worth 8.3 billion kroner, through a drop in wealth tax from 1 percent to 0.75 percent, among other measures.
In the expenditures chapter, defence will get a 3.4 percent increase, as the growing jihadist threat and the role of Russia-a neighbour of Norway- in the Ukrainian crisis create an unstable environment.
Six new F-35 fighter jets will be ordered next year, on top of another 16 already in the pipeline, with an aim to eventually reach a total of up to 52.
The budget will need to be negotiated with two small centre-right parties, since the government does not hold a majority in parliament, but the main lines of the proposal are expected to remain unchanged.
Norway indicated it will spend more of its oil wealth in 2015 to counter a slowdown of its economy, according to budget plans presented Wednesday.
Next year, the right-wing government plans to spend 163.7 billion kroner (20 billion euros, $25 billion) of oil revenues, which are usually put into a sovereign wealth fund, the largest in the world.
The figure amounts to three percent of the fund, higher than the 2.8 percent used in this year’s budget, but still below the four percent authorised limit.
The extra funds are meant to sustain growth, which expected to slow to 2.0 percent in 2015 from 2.2 percent this year, mostly due to a drop in oil investments.
“Lower demand from the petroleum sector poses a challenge to the mainland economy (excluding offshore oil production),” Finance Minister Siv Jensen said.
“We must ensure that our economy is able to adapt to changing circumstances.”
Unemployment, among the lowest in the world, is expected to rise to 3.6 percent from 3.4 percent this year, according to the government’s forecast.
Including oil revenues-which are usually presented separately in Norway’s accounting-the budget should reach a 178.3-billion-kroner surplus, or 308 billion kroner taking into account the yield of the pension fund.
The fund, which is invested in shares, bonds and real estate outside Norway, should amout to 6,015 billion kroner at the end 2015, compared to 5,545 billion kroner at the end of this year.
The budget proposal, the first financial bill presented by the government since it took office in October last year, plans tax cuts worth 8.3 billion kroner, through a drop in wealth tax from 1 percent to 0.75 percent, among other measures.
In the expenditures chapter, defence will get a 3.4 percent increase, as the growing jihadist threat and the role of Russia-a neighbour of Norway- in the Ukrainian crisis create an unstable environment.
Six new F-35 fighter jets will be ordered next year, on top of another 16 already in the pipeline, with an aim to eventually reach a total of up to 52.
The budget will need to be negotiated with two small centre-right parties, since the government does not hold a majority in parliament, but the main lines of the proposal are expected to remain unchanged.
