Norwegian SWF to contribute over $40bn to public finances

On the 05/13/20 at 8:03AM

Norway plans to withdraw 4.2% this year from its sovereign wealth fund to supply its budget, more than the 2.6% initially planned, the country’s finance minister announced on Tuesday. The ceiling on withdrawals is theoretically set at 3% of assets under management as of 1 January, but waivers are possible in the event of economic distress. Norway is forecasting a 4% recession in 2020, followed by a 4-7% rebound in 2021.

Norges Bank Investment Managers (NBIM) manages the world’s largest sovereign-wealth fund, with AuM of NOK 10.4trn (about €940bn). The fund will now contribute $40.6bn (€37.4bn) to Norwegian public finances, far more than the $23.6bn previously planned. Its annual contribution will come mainly from the sale of bond assets, NBIM’s CEO said in March.

During the 2008-2009 financial crisis, the fund surpassed its ceiling on withdrawals, which at the time was set at 4%. Its contribution came to 4.1% then.

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