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Norway to spend record USD 50bn of oil wealth on recovery

Norway is relying on its USD 1.3 trn sovereign wealth fund more than ever, as the country ratchets up spending without turning to bond markets to provide economic relief from the pandemic.

Prime Minister Erna Solberg | Photo: HEIKO JUNGE/NTB

The government of Prime Minister Erna Solberg, facing an election in September, is raising this year’s so-called structural non-oil fiscal deficit by more than 9 percent to almost USD 50bn (NOK 403bn) it said on Tuesday. Government withdrawals, as a share of the world’s biggest wealth fund, will reach 3.7 percent, compared with the central bank’s estimate of 3.3 percent.

"Fundamentally, it shows that the government sees a bigger need for fiscal support throughout this year," Handelsbanken analyst Marius Gonsholt Hov said in a client note.

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