Norges Bank will funnel oil revenues from its sovereign wealth fund to ease the economic impact of the coronavirus outbreak in Norway, the central bank said Wednesday.
Managers of the Government Pension Fund Global (GPFG) will ramp up daily sales of foreign exchanges to 1.6 billion kroner (US$142 million), up from 500 million kroner (US$44 million), amid greater calls this week from the nation’s officials for an emergency fiscal response.
“The effects of the coronavirus outbreak on the Norwegian economy and the measures implemented to limit the consequences of the outbreak entail an increase in government spending and a decline in government revenues,” the firm’s statement read.
The Norwegian government typically uses oil revenues from the GPFG every year to offset budget deficits. As a fiscal rule, the petroleum revenue spending should not exceed the expected real return of the pension fund, which is currently at 3%.
But the extraordinary measure comes as countries all over the world contend with the coronavirus pandemic. On Wednesday, Norwegian Prime Minister Erna Solberg proposed legislation that would allow the government to take action without consulting Parliament, Reuters reported. The country has already issued $8.9 billion in loans and bonds to support the economy.
Tanking oil prices have already had an impact on Norway’s sovereign wealth fund, the biggest in the world. The GPFG is currently worth about $888 billion, down from roughly $1.07 trillion just last month.
Meanwhile, the COVID-19 disease has claimed roughly 9,000 lives globally. Norway has about 1,500 cases and six fatalities, the nation’s health officials said.
Norway already has shut down schools, restaurants, and sporting events in its efforts to clamp down on the spread of the disease. Separately, the prime minister has also held a special conference to answer questions on the coronavirus just for children.