Norway to Start Withdrawals From Oil Fund to Plug Deficits
- Record spending will provide growth stimulus of 0.7ppt
- Fund says it's well equipped to handle shift in inflows
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Norway predicts it will for the first time need to withdraw cash from its $820 billion sovereign wealth fund as western Europe’s biggest oil exporter uses a record chunk of its petroleum revenue to cover budget holes and stimulate the economy.
The minority coalition plans to spend 208 billion kroner ($25.2 billion) of its oil wealth next year, topping the 204 billion kroner it predicts it will receive from offshore oil and gas fields, according to the 2016 budget. That implies a withdrawal from the fund of 3.7 billion kroner, after an inflow of 38 billion kroner this year.