Norway’s government has announced plans to draw down a record 420bn (€38bn) kroner from its oil fund as coronavirus and the oil price crash have pushed unemployment to the highest rate in 75 years.
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.”