Norway Uses Its Fund Planned for Future Generations to Fix Economy Today

Norway’s $900 billion oil fund might no longer receive money, and moreover some of the fund’s money will be used to keep the country’s economy in check, amid the falling oil prices.

The plunge in global oil prices forced the Norwegian government to start using its $900 billion national oil fund, said Yngve Slyngstad, the director of the fund, according to Bloomberg.

Norway has a rule according to which the government has a right to cap the use of the oil fund's money. However, the current minority coalition announced in late 2014 that it would use a record 164 billion kroner ($21.8 billion) in 2015, or nearly 3 percent of the oil fund.

Slyngstad revealed earlier this week that the fund received the lowest amount of new capital in the first quarter of this year than it did during the last 16 years, Bloomberg said.

Vast oil reserves in the North Sea made Norway a very wealthy country. The national oil fund was designed to keep some of Norway's wealth for future generations. So far, the fund helped to keep the country's economic problems, such as joblessness and a shrinking economy, at bay.

The oil industry accounts for almost a quarter of Norway's GDP. Knowing that they need to do something to avoid future economic shocks when oil prices get low, the Norwegian government has been trying to diversify their economy.
  [sputniknews.com]
4/5/15