OSLO (Reuters) -Norway’s minority government said on Friday it plans to raise spending in 2024 from the country’s $1.4 trillion sovereign wealth fund, the world’s largest, despite rampant inflation that has hit households and businesses.
The government of Labour and the Centre Party proposed withdrawing 409.8 billion crowns ($37.3 billion) from the fund next year, up from a revised 372.3 billion in 2023, and must now negotiate with the Socialist Left to pass the budget.
Gross domestic product for the non-oil economy is expected to grow by 0.6% this year, rising to 0.8% in 2024 and 1.9% in 2025, the finance ministry predicted.
“The proposed budget is fiscally responsible and will avoid exerting upward pressure on interest rates. The aim is to support employment, while ensuring that inflation is allowed to come down,” the government said in a statement.
The so-called structural non-oil deficit for next year was set to 2.7% of the fund’s expected value at the end of 2023, the finance ministry said, well within parliament’s annual 3.0% spending cap.
The budget impulse was positive by 0.4%, indicating that the budget contributes to a higher economic growth.
($1 = 10.9943 Norwegian crowns)
(Reporting by Terje Solsvik, editing by Gwladys Fouche)
