NORWAY - Governor Svein Gjedrem has said the NOK1.4trn Government Pension Fund could more than double in size over the next decade to twice the country's GDP.
Speaking at a conference on Norwegian experiences in balancing economic development with macroeconomic stability, Gjedram said the fund had a market value of roughly 73% of GDP by end 2005, but added the fund’s value was rising rapidly and could continue to do so.
“The Fund is now approaching the nominal value of one year’s GDP and may reach two in the course of the next decade,” he said.
Gjedram hastened to add that the country faced burdensome pension costs in the future.
“Norway, like many countries, is facing substantial fiscal challenges” he said. “Financing the large pension payments that will have to be disbursed in the coming years will be very demanding.”
In his presentation, Gjedram also highlighted the fund’s growing focus on investment in India. “Last year, the Government Pension Fund made its first investments in the Indian stock market. By the end of 2005, the Fund had holdings in more than 70 Indian companies.”
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