Norway will spend more of its oil wealth this year to help stimulate the economy and create jobs in what the finance minister on Friday called the most expansive national budget in 30 years.
The Nordic country is a major exporter of oil and natural gas, and the central government has been using surplus revenues to cushion the impact of the world economic crunch.
"We have acted quickly and strongly," said Finance Minister Kristin Halvorsen in presenting the government's regular half-year revision of the national budget. She said Norway has been less affected than most countries because of its oil wealth.
The three-party majority coalition will increase central government spending of oil revenues by 9.5 billion kroner ($1.48 billion) to about 130 billion kroner ($20 billion), roughly 15 percent of total expenditures of 851 billion kroner for ($133 billion) for 2009. That is a 6.75 percent increase from 2008.
The government still projects a surplus of 237.4 billion kroner ($37 billion) to be put aside in its fund for foreign investment, called the Government Pension Fund Global, that is currently worth more than 2 trillion kroner ($310 billion).
The Norwegian state profits from oil and gas both through taxes imposed on production from its offshore fields and from direct investment in petroleum projects.
The northern country had been enjoying years of unprecedented prosperity, but had projected a downturn even before the global finance crisis shook the world economy.
Although Norwegian unemployment is increasing, it is expected to remain low, at 3.75 percent this year and 4.75 percent in 2010, compared to 2.6 percent in 2008.
Other key projections in the revised budget compared to 2008 were: a 5.3 percent decline in exports, compared to growth of 0.9 percent last year; no growth in private consumption compared to a 1.5 percent increase, inflation of 1.8 percent compared to 3.8 percent and wage growth of 4 percent compared to 6 percent.
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