Norwegian Government to Use More Sovereign Fund Oil Wealth
The Norwegian Ministry of Finance released an Amendment to its 2014 fiscal budget today that indicates a lowering of tax rates and an increase in transfers from the Government Pension Fund Global (GPFG), Norway’s sovereign wealth fund, to cover the non-oil fiscal budget deficit.
In response to Dutch disease-like symptoms, the new Norwegian government, led by Prime Minister Erna Solberg, is seeking to stimulate growth in parts of the domestic economy that have been priced out by the explosive growth in the petroleum sector. Sectors experiencing a strain are housing and trade. According to a statement, “The petroleum sector, including subcontractors, has expanded, whereas the high cost level has posed challenges for the trade exposed industries.” The new fiscal budget is responding by lowering taxes and establishing a “productivity commission” slated with giving advice on how to strengthen growth and productivity.
In addition, the government is augmenting spending on growth projects. “The increased spending of petroleum revenues is targeted on measures that stimulate growth and production,” says Minister of Finance Siv Jensen.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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