Norway revealed its intention to increase spending from its $1.6 trillion sovereign wealth fund; To face the current economic challenges, stimulate its economy and overcome the recession.

The government of Prime Minister Jonas Gahr Stohr of the Labor Party is working to expand the structural non-oil fiscal deficit for 2024 to 419 billion kroner ($39 billion), compared to 410 billion kroner last October.

Withdrawals from the Fund as a share of mainland GDP are expected to increase by 0.7 percentage points from last year.

Although inflation in Norway is gradually slowing, the economy is experiencing a significant recession.

In light of the new geopolitical situation, Norway is giving greater priority to internal and external security, with the government committed to increasing investment in defence, security and police to counter Russian risks.

The Norwegian Central Bank indicated that the unexpected weakness, combined with the resilience of the economy, may lead to the postponement of the interest rate cut until after the fall.

Under the monetary rule, annual government spending for the Fund is capped at 3% over the long term, but the ministry warns that fiscal policy may be more vulnerable to permanent reductions in the value of the Fund due to its increasing size.

The Norwegian government faces criticism that the budget does not meet its pledges on climate and reducing inequality. However, the mainland's GDP is expected to grow by 0.9% this year, in line with the ministry's estimate and higher than the central bank's forecast.