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Norway to tap more oil fund as growth slows

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Norway to tap more oil fund as growth slows
Statoil's Oseberg A facility. Photo: Harald Pettersen/Statoil
16:00 CEST+02:00
Norway's right-wing government has decided to tap more of its gigantic oil fund this year, predicting that the ongoing slump in the oil industry will mean lower tax revenues and higher spending on unemployment benefit.
It's out-take, at just 2.6 percent of the value of the $890bn fund, is nonetheless well within the country's self-imposed limit of 4 percent.   
 
In an announcement on Tuesday the government said that money drawn from the oil fund would now contribute 168.8bn kroner ($22.4bn) to the budget in 2015, a 5bn kroner ($600m) increase on the amount announced last year. 
 
The country's finance minister, Siv Jensen, said that while the economy was slowing, it was still healthy. 
 
“There is no crisis in the Norwegian economy, but we estimate slightly lower growth than we did in the budget for 2015.” 
 
According to the finance ministry's latest estimates, Norway's GDP (with the offshore oil sector excluded) will slow to 1.3 percent this year from last year's 2.3 percent. 
 
The government estimates that the slow down will lose it some $10bn in tax revenues. 
 
But Jensen stressed that she would not resort to fiscal stimulus to counteract the slow down. 
 
"Competitive businesses must adapt to lower demand from the Norwegian petroleum sector," she said. "These adjustments are likely to happen earlier than previously anticipated due to the oil price decline."
 
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