The Norwegian government presented its state budget proposal for 2020 on Monday, indicating that the savings in the oil fund for the rest of this year and 2020 will be much less than previously anticipated, online newspaper E24 reported.
Norway is to save 5.6 billion kroner (615 million U.S. dollars) this year and 3.9 billion in 2020, after the use of oil money by the government. Previously in May, the government said that it expected to save 33.6 billion kroner in the fund this year.
The latest announcement was a sharp downward adjustment from earlier estimates and came in the aftermath of decreased oil prices. The government expected the oil prices to fall from 538 kroner a barrel this year to 476 kroner a barrel next year.
Nevertheless, the oil fund can continue to grow if it gets a good return on its ownership in global equities, bonds and real estate, and if the krone does not strengthen, the report said.
The Norwegian fund, formally known as the Government Pension Fund Global (GPFG), is ranked as the world’s biggest sovereign wealth fund and is approaching value of 10,000 billion kroner.
In 2016 to 2018, Norway did not save oil money, due to state’s expenses. (1 U.S. dollar = 9.10 Norwegian kroner)