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Norway Central Bank Chief Warns of ‘Sharp’ Drop in Wealth Fund

  • Says fiscal mechanism can’t allow for rising oil spending
  • Says oil cash spending needs to be seen in relation to GDP
Oystein Olsen.

Oystein Olsen.

Photographer: Krister Soerboe/Bloomberg
Updated on

Norway’s central bank governor sharpened his warning on rising spending of oil revenue as he drew up scenarios for a 50 percent loss of capital over the next 10 years for the world’s biggest sovereign wealth fund.

Governor Oystein Olsen said that the continued rise in oil cash spending, which now accounts for about 20 percent of the budget and 8 percent of gross domestic product, must now be halted to protect the $900 billion fund, the world’s largest sovereign pool of cash.