NORWAY – The Norwegian government plans to spend NOK148.5bn (US$26.7bn) of the Government Pension Fund – Global's assets to help spur economic growth, the Ministry of Finance said as it unveiled its proposed 2010 budget yesterday.
"The extraordinary escalation in the spending of oil revenues to deal with the financial crisis and the global recession has brought spending of petroleum revenues to a high level," the Ministry wrote in the national budget.
The Ministry of Finance is allowed to funnel the Pension Fund's returns, targeted at 4% per year, into the wider economy but the government is allowed some leeway depending on economic conditions. In 2010, the government plans to exceed the expected return by NOK44.6bn.
"The room for further increases in spending is small. This underscores the need to quickly return to the 4% trajectory as growth recovers and the outlook improves," the budget reads.
As a percentage of gross domestic product, the use of oil revenues in the coming year is 2.3 percentage points higher than the return of the Pension Fund, also known as the Oil Fund.
This is the second consecutive year of increased spending of oil revenues. The 2009 budget, touted as the most expansionary budget in the past 30-years, also called for the government to surpass the 4% spending limit. (Global Pensions; May 18, 2009)
Assets in the pension fund are expected to reach NOK2.8trn by the end of 2010.
Get the latest news direct to your inbox.
More from Norway
Updating your subscription status
This Aberdeen Asset Management hedge fund roundtable discusses what investors are looking for in hedge fund governance; lessons that have been learned from the past and how the industry is placed for the future.
The all-new Pensions and Benefits Show will be held on 12th-13th June 2013 at ExCeL, London.
The Pensions Institute provides 15 good practice principles in modelling defined contribution pension plans. These principles cover the issues such as: model specification and calibration, modelling quantifiable uncertainty, modelling member choices and modelling longevity risk.
After what has felt for many like an eternity, auto enrolment has finally arrived. As the UK's largest employers complete the process, now is an ideal time to consider some of the lessons learned so that employers with auto enrolment on the agenda for 2013, can avoid some of the pain and pitfalls that may occur along the way.
This whitepaper provides a checklist to ensure you are compliant with the new legislation.
GBP35000 - 50000 per annum
GBP - 23000 per annum
Send to a friend