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On Tuesday, the government introduced the spring budget adjustment. The changes are very large and the outlook is characterized by great uncertainty.
The government is breaking the action rule and will spend 419.6 billion this year, which is NOK 174.4 billion more than last year. This corresponds to 4.2 percent of the estimated capital in the Global Government Pension Fund at the beginning of the year.
“We spend a lot of money,” said Finance Minister Jan Tore Sanner (H) on Good Morning Norway, just before the announcement.
– Norway and the world economy have been hit by the biggest setback in peacetime. Norway has a very good starting point because we have already undergone a restructuring and we have strong government finances, Sanner tells TV 2.
GDP will fall four percent
The virus outbreak has affected the Norwegian and international economy and the outlook for the Norwegian economy has weakened significantly, writes the Ministry of Finance in a report on the key figures in the budget proposal.
“In the revised national budget for 2020, continental GDP is forecast to drop 4.0 percent this year, but uncertainty is high,” the report says.
Unemployment will increase
Because many have been laid off, Norway has the highest recorded unemployment rate in 75 years.
“Unemployment is projected to rise from 2.2 percent in 2019 to 5.9 percent this year,” writes the Ministry of Finance.
At the same time, several companies have reopened, which has contributed to a decrease in the number of registered unemployed in recent weeks. In the first week of May, the number of unemployed fell by 23,000, of whom almost 19,000 were laid off. At the same time, it is
become partially unemployed. In total, there was a decrease of 12,000 registered people, totally or partially unemployed.
Here are the budget leaks.
- A billion dollar solution to help package companies overcome the crisis and recover money from their customers.
- NOK 20 billion is set aside to secure domestic trade and exports of seafood and industrial products in a new scheme at GIEK (Export Credit Guarantee Institute).
- Avinor receives NOK 5 billion to cover lost revenue. The government wants to avoid complete stops at major airport developments, especially in the north.
- Public transport receives NOK 2.5 billion. NOK 1.5 billion adds to the one billion already approved.
- The crisis package for culture, sport and volunteering will run from NOK 1 to 1.6 billion and will run from March 12 to June 15.
- Nav receives NOK 700 million in increased funds for operations to deal with increased stress during the crown pandemic.
- 500 million educational package. 4,000 new places of study and 1,000 new places of vocational school.
- An additional 500 million for housing support through the Housing Bank.
- 400 million for a package of measures for vulnerable children and youth affected by coronary measures.
- The government grants an additional NOK 300 million to Nysnø Climate Investment, according to E24. As a result, the fund has received NOK 1 billion this year.
- 300 million in crisis package for the media industry.
- 180 million to cover the current debt obligations of poor countries and free up funds for the coronary response.
- 140 million for digital investment in the school, among other things to strengthen education at home.
- The government will spend an additional NOK 100 million to dispose of cargo ships over 30 years old, according to Teknisk Ukeblad.
- 102 million for the World Bank Development Fund for the poorest countries (IDA).
- 50 million forestry action package. Siva in Trondheim receives an additional grant of NOK 40 million to help innovation companies overcome the virus crisis, writes Adresseavisen.
- Courts receive NOK 35 million for digitization. Seamen’s Church receives 16 million, writes Vårt Land.
- NOK 15.6 million for the archaeological excavation of the Viking tomb Gjellestadskipet in Halden.
- 14 million to the Norwegian Labor Inspection Authority and 1 million to the Norwegian Petroleum Safety Authority to follow the new rules for recruiting labor.
- NOK 5 million for research into women’s health.
- The foundation of the Gestapo Museum has increased its support from 1 to 2 million.
Source: TV 2 / NTB
– gloomy image
The projections in the revised national budget are dramatic, and it’s okay for the government to spend a lot of money now, says DNB chief economist Kjersti Haugland.
– The figures tell us that we are in an exceptionally difficult period for the Norwegian economy, and the forecasts show a grim picture. At the same time, it could have been worse, because this is not among the most negative estimates, says Haugland.
to NTB.
She believes the government is absolutely right to spend the oil money and go beyond the action rule this year.
– This is perfectly in line with the rule of action, one must exceed 3 percent in bad times. So it is important to stay in good times, she says.
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