Norway’s plan to dig deeper into the sovereign wealth fund to fund this year’s public spending was reinforced this morning as the finance minister presented the revised 2024 budget, with Trygve Slagsvold Vedum justifying the increased spend largely with the country’s defence needs.

According to the new figures, Norway will use NOK418.7bn (€35.9bn) from the Government Pension Fund Global (GPFG) in the 2024 budget, a figure that is up from the NOK409.8bn pegged for public spending in the original 2024 budget figures last October.

Both figures are significantly higher than the NOK372.3bn of oil fund money that was used in 2023, which was in turn up from the 2022 figure of NOK338.6bn.

Presenting the revised budget, Vedum said: “War in Europe has created uncertainty. In our revised budget proposal for 2024 we are increasing investment in defence capability and policing, to safeguard Norwegian people”.

He said the overall budget expenditure outlined was within a policy framework which would allow for improved household finances for people throughout Norway.

The finance ministry said spending from the GPFG – into which flows Norway’s considerable petroleum revenues – was currently projected to correspond to 2.7% of the value of the fund at the start of the year.

This meant the government’s revised budget proposal remained “fiscally responsible and aligned with the original National Budget proposal last autumn”, the ministry said.

Petroleum revenue spending was projected to be well below the fiscal rule stipulation that transfers from the fund over time should equal 3%, it said.

That expenditure included financing NOK60bn relating to the war in Ukraine and its consequences, the ministry added.

“The reality we face in today’s circumstances would make it irresponsible not to strengthen our defence capability and to continue to stand with Ukraine,” Vedum said.

“Neither can we neglect to safeguard Norwegian people, we need more men and women in uniform,” he noted.

As well as in absolute terms, Norway’s SWF spending is also increasing between 2023 and 2024 as a proportion of its non-oil GDP – rising by 0.7 percentage points in those terms between the years.

At the end of 2023, the GPFG had NOK15.8trn of assets – a value which has since increased to NOK17.8trn, according to the rolling figure on the website of the GPFG’s manager, Norges Bank Investment Management.

Read the digital edition of IPE’s latest magazine