Norway shatters wealth fund spending cap amid pandemic

Norway will sharply raise spending this year from its trillion-dollar sovereign wealth fund, the government said on Tuesday, exceeding a self-imposed cap for the first time in over a decade to aid an economy reeling from the novel coronavirus crisis.

Cash withdrawal from the fund is now projected to hit a record 419.6 billion Norwegian crowns ($40.6 billion) in 2020, the Finance Ministry's mid-year fiscal review showed, up from 243.6 billion crowns seen last October.

The so-called structural non-oil deficit thus corresponds to 4.2% of the fund's Jan. 1 value, the government said, making use of a provision in its fiscal framework that allows withdrawals to exceed a 3% cap to counteract economic setbacks. ($1 = 10.3335 Norwegian crowns)