Alexa
  • Directory of Taiwan

Norwegian coalition to spend 9 percent more oil wealth in 2007 national budget

Norwegian coalition to spend 9 percent more oil wealth in 2007 national budget

Norway's center-left coalition government Friday said it will spend 9 percent more of the Nordic nation's oil wealth in its 2007 national budget.
However, the majority government said the increase remains within the spending limits set by parliament to avoid overheating the national economy.
"We have never, at any time, used more oil kroner in a national budget," Finance Minister Kristin Halvorsen of the Socialist Left Party said in presenting the budget to the legislature.
The coalition of Labor, the Socialist Left and the Center took over after an ousted right-leaning coalition presented its draft budget a year ago, so this was the first budget the center left drafted from scratch. The proposal was seen as economically neutral, neither stimulating nor slowing growth.
The Nordic country of 4.6 million people is the world's third-largest oil exporter, after Saudi Arabia and Russia, and a major natural supplier. Norway sets aside the central government surplus in a fund for foreign investment.
The 2007 budget projected total revenues of 1.02 trillion kroner (US$157 billion,euro121 billion) an increase of 8.3 percent from 2006. Projected spending for 2007 is 712.5 billion (US$106.6 billion, euro84.8 billion) kroner, a 4.5 percent increase over this year.
Halvorsen said the surplus of 307.9 billion kroner (US$47.3 billion, euro36.6 billion) will be transferred to the Government Pension Fund - Global, which is expected to reach a value of nearly 2.2 trillion kroner (US$338.5 billion,euro262 billion) at the end of next year.
To control spending, parliament has set a target of spending no more than the expected 4 percent annual return from the pension fund. The 2007 budget is the first to stay under the limit since it was adopted in 2001.
"If we use too much oil money, there is a danger of losing many workplaces in competitive industries. Then unemployment can increase," said Halvorsen. "If interest rates increase quickly and strongly, many can end up with debt problems."
With an economy booming on high oil prices, Norway currently has low unemployment, with a labor shortage in some sectors, as well as low inflation and interest rates.
The left-leaning government also proposed increase taxes, particularly for those with the largest incomes and personal wealth. Halvorsen said the extra income will be used to strengthen the Norwegian welfare state.
The Confederation of Norwegian Enterprise, the main employers association, immediately criticized the budget.
"The national budget is bad news for companies," it said in a news release. "The new tax increases mean that Norway is going in the opposite direction from the rest of Europe."
Other key figures in the budget, compared to 2006 were: gross domestic product growth of 3.6 percent (2.4 percent), inflation of 1.75 percent (2.5 percent), wage growth of 4.5 percent (3.75 percent), and unemployment of 3.25 percent (3.5 percent).
____
On the Net:
http://www.odin.dep.no


Updated : 2021-08-03 02:42 GMT+08:00