Government's oil fund spending plan hits snag as fund value drops

Norway's budget proposal ties future spending to a projected size of the sovereign oil fund, with a withdrawal rate slightly below the traditional rule. New data from Norges Bank show the fund's market value has slipped considerably due to a tech-stock slump in the U.S. and a sharply appreciating krone, leaving it several hundred billion kroner lower than the government's estimate. This gap translates into a reduction of roughly four percent in the fund's worth, meaning the government may have tens of billions less to allocate unless it raises the withdrawal rate.

The finance ministry stresses that one outlet budget figures were based on summer valuations and that a revised estimate will be used for the 2027 budget. Experts caution that while the dip is notable, it reflects normal market volatility and does not signal a structural problem for the fund.