Norway will spend more of its vast oil wealth next year to fight the economic crisis, part of a package of new stimulus measures to be revealed on Jan. 26, Prime Minister Jens Stoltenberg said on Friday.
Norway is a major oil exporter and has put aside more than 2 trillion kroner ($290 billion) in a fund for foreign investment. Normally, the government limits spending of oil wealth to 4 percent of the fund's total value _ the expected annual return on investment _ to not deplete the fund.
But Stoltenberg said it can spend more in troubled economic times and pledged new economic stimulus measures.
``These will include an even greater increase in funding for public works and construction, and maintenance,'' he said at his regular half-year news conference. The Labor Party leader said that will boost the economy and jobs market while completing badly needed projects, such as road and school improvements.
He said next month's measures will come in addition to steps already taken, including offering new government bonds in October worth 350 billion kroner to banks to help improve liquidity in the market.
The center-left coalition government had been cautious about spending oil wealth in recent years because Norway's economy was booming to the point that experts feared it might overheat. However, oil prices have now plunged roughly $100 from a record $147 per barrel in July.
Stoltenberg said oil wealth leaves the Nordic country of 4.8 million people in much better shape than many other nations. He pointed to Norway's low unemployment rate of 2 percent in December, but warned that the jobless rate is excepted to rise.
On Wednesday, the central bank made its biggest key interest rates cut in 22 years, reducing the rate by 1.75 percentage points to 3.0 percent, to stimulate the economy.
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