UPDATE 1-Norway’s outgoing government proposes wealth fund spending cut

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OSLO, Oct 12 (Businesshala) – Norway should sharply cut spending from its $1.3 trillion sovereign wealth fund in 2022 as the economy recovers from the pandemic, the outgoing centre-right minority government told parliament on Tuesday.

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In its last official acts before stepping down this weekend, the government proposed to withdraw 322.4 billion Norwegian crowns ($37.6 billion) from the funding fund next year, down from 406.8 billion crowns in 2021.

Prime Minister Erna Solberg’s government of the Conservative Party lost elections to parliament last month and will be replaced here by a coalition of the left-wing Labor Party and the Rural Center Party.

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The new government will have only a few weeks to present its own budget amendments and is thus expected to comprise a significant part of Solberg’s spending plan for 2022.

In it, the so-called structural non-oil deficit for the next year was set at 2.6% of the fund’s expected value at the end of 2021, the finance ministry said, within Parliament’s 3.0% spending cap. ($1 = 8.5759 Norwegian Crown) (Reporting by Terje Solsvik, Editing by Gvladis Foche)

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