Norway hikes government spending

Oil-rich Norway’s coalition government announced a 20 billion kroner ($2.9 billion) stimulus package on Monday intended to dampen the impact of the global financial crisis with tax cuts and increased spending.

Finance Minister Kristin Halvorsen said the national budget revision “is the most ambitious fiscal stimulus proposed in more than 30 years to boost growth and employment.”

Norway is a major oil exporter and has put aside more than 2 trillion kroner ($286 billion) in a fund invested abroad to avoid overheating the domestic economy. However, the government can used more oil wealth in Norway when needed.

Halvorsen said government spending will be increased by 16.75 billion kroner ($2.4 billion) for such projects as road and railway construction; maintenance and projects in townships; and renewable energy projects. The remaining 3.25 billion kroner ($466 million) comes as tax relief to business.

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