OSLO, May 11 Reuters Norway should spend a record amount of cash from its 1.3 trillion sovereign wealth fund this year as it continues to battle the pandemics economic impact, the centreright minority coalition government told parliament on Tuesday.
Finance Minister Jan Tore Sanner now proposes withdrawing 402.6 billion Norwegian crowns 48.66 billion from the wealth fund in 2021, up from 331.1 billion crowns seen last November.
Extraordinary economic support measures related to the pandemic account for a large bulk of the increase, Sanner said in a statement.
The government of Conservative Prime Minister Erna Solberg, which lags the centreleft opposition in opinion polls ahead of a September parliamentary election, will now negotiate with the rightwing Progress Party in the hope of passing the budget.
The previous spending record from the fund, set last year, was 369.3 billion crowns, finance ministry budget data showed.
The socalled structural nonoil deficit corresponded to 3.7 of the fund for 2021, the Finance Ministry said, up from 3.2 seen in November and exceeding parliaments longterm guidance of spending no more than 3.0 in any given year.
It would be the second consecutive year of breaking the spending cap, taking advantage of a rule that allows for extra withdrawals in times of economic hardship.
Mainland gross domestic product, also known as nonoil GDP, is now expected to rise by 3.7 in 2021, less than the 4.4 predicted last October.