In a press release issued ahead of the publication of the revised government budget at 10.45am, Norway's government said that the events of the past three months had transformed the short-term outlook for the country's economy.
“The virus outbreak has hit the Norwegian and the international economy. The outlook for the Norwegian economy is considerably weakened,” the press release read.
“Because so many have been laid off, Norway now has the highest registered unemployment rate in 75 years.”
The 420bn kroner corresponds to 4.2 percent of the fund's total capital at the start of the year.
Under Norway's rules for managing the fund, all governments are committed to ensure that the use of the fund does not exceed an average of 3 percent of its total capital annually.
“It's a big bill, we are spending a lot of money, and we should be aware that if we spend more money now, it means we can spend less in the years to come,” Norway's finance minister Jan Tore Sanner told state broadcaster NRK on Tuesday morning.
“However, the alternative would have been even more bankruptcies, even more unemployed people and even bigger setbacks for the Norwegian economy.”
In the statement, the government said that the unemployment rate in Norway was projected to rise from 2.2 per cent in 2019 to 5.9 per cent this year.
According to the E24 website, 246,000 people are currently fully unemployed, or 8.8 per cent of the workforce. If the partially unemployed are added, the tally rises to 408,400 people, or 14.6 percent of the workforce.
The government said it now expected GDP to fall by 4.0 per cent this year.