A fund investing Norway’s oil wealth in foreign stocks and bonds grew by five per cent to 1.876 trillion Norwegian crowns ($308.8 billion) in the first quarter from 1.784 trillion at end-2006, the central bank said.
The Government Pension Fund – Global, known commonly as the “oil fund” – is one of the world's biggest investment funds and saves Norway’s oil and gas money for future generations when the black gold runs out.
The fund, established in 1990, was worth nearly $66,000 per capita of the Nordic nation’s 4.69 million population at the end of the quarter, approaching the size of Norway’s gross domestic product (GDP) which grew to $353 billion last year.
The figures released on Tuesday are the fund’s official quarterly accounts, but the central bank’s monthly balance sheet, which gives a fairly accurate picture, has already shown the fund grew to about $315 billion by the end of April.
The government has projected in its revised 2007 budget that the fund will grow to 2.16 trillion crowns by the end of the year.
The total return on investment during the quarter was 1.5 per cent, which the central bank said was 0.09 percentage points above the benchmark set by the government.
“The rise in international equity markets made the largest contribution to the return,” the central bank, which manages the fund, said in a statement.
“The Ministry of Finance transferred 93.4 billion crowns in new capital, which is the largest quarterly transfer in the Fund’s history,” the central bank, Norges Bank, said.
The return on investments was 26.7 billion crowns, while a stronger crown in relation to investment currencies reduced the market value by 27.6 billion, it said. “However, the change in the crown exchange rate has no effect on the Fund’s international purchasing power.”
The fund is not allowed to invest in Norway to prevent unwanted appreciation of the currency and overheating of the oil-driven economy which is into a fourth year of strong growth.
Norway is the world’s fifth biggest oil exporter and western Europe's biggest gas exporter.
