Norway is set to draw down a record amount of cash from its sovereign wealth fund, the largest in the world, to support its economy, according to a revised budget draft published Tuesday.
In 2020, the centre-right government plans to use 420 billion Norwegian kroner ($41 billion or 37.9 billion euros) from the fund to support an economy badly hit by the coronavirus pandemic and plunging oil prices.
The fund, commonly known as the oil fund, is currently valued at over 10 trillion kroner.
While the boost to the economy represents an estimated 5.1 percent of the country’s gross domestic product (GDP), Norway’s economy is still expected to contract by four percent this year.
According to official projections, unemployment is forecast to rise to 5.9 percent from 2.2 percent in 2019.
“Increased spending has been a necessity in the current situation,” Finance Minister Jan Tore Sanner said in a statement.
“Both to avoid an even sharper downturn and to help healthy companies through the crisis so they can create jobs and growth when normal circumstances return,” Sanner added.
The wealthy Nordic country, the largest producer of oil in Western Europe, is suffering doubly from the economic impact of the COVID-19 epidemic and the plunge in oil prices.
