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Norway reduces withdrawals from the Government Pension Fund

Norway Funds

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Norway will withdraw less money from its state fund thanks to the recovering economic growth, shows the draft budget for 2019. The country’s right-wing government plans next year to use 2.7% of the Government Pension Fund, which is world’s largest fund with assets worth 1 trillion USD. This is below the fixed ceiling of 3%.

The Norwegian budget is “neutral”, which means it is neither too expansive nor restrictive. In 2019, the economic growth is expected to accelerate to 2.7% from 2.3% this year and 2% in 2017.

“The slowdown that has been caused by the fall in oil prices is over, and again we are in a strong growth”, said the Norway’s Finance Minister, Siv Jensen. “We have to be careful not to destroy this by pushing too hard the footsteps of our economic policy”, added she.

Norway is the largest producer of hydrocarbons in Western Europe.

Among the main financial measures proposed in the draft budget are a reduction of corporation tax from 23% to 22%, as well as decrease in property tax.

On the other hand, excise duties on fuels, alcohol and tobacco products should increase, roughly with the rate of inflation. The same is true for the TV tax.

In order for the draft budget to pass to parliament, the minority government must secure the support of the small Christian People’s Party, which is its traditional ally, but is currently considering its political position.

The Central Bank of Norway (Norges Bank) raised its key rate on September 20 for the first time in seven years, indicating the improved economic situation in the country.