OSLO, Jan 26: The Norwegian government unveiled on Monday a 20-billion-kroner ($2.88bn) stimulus package to combat the effects of the global economic crisis and boost employment.

The plan, announced eight months before elections are scheduled in Norway, is the biggest economic package to be presented in the Scandinavian country in more than 30 years and comes as the government expects zero growth this year.

The package comprises investment in construction, infrastructure and the renovation of state-owned buildings, as well as tax breaks for companies.

“We’re not going to be able to put a halt to rising unemployment but the goal is to limit the increase,” Finance Minister Kristin Halvorsen told reporters just before presenting the package in parliament.

The measures are due to be voted on by members of the assembly, seen as a formality as the centre-left government holds a majority.

Halvorsen said the programme was “a good answer to bad news.”

The government will finance the measures by tapping more money than usual from the Government Pension Fund, which contains almost all of the country’s vast oil revenues.

Norway is one of the world’s biggest oil and gas exporters but despite its wealth it has not been spared from the current global crisis which has depressed energy prices sharply.

The government on Monday also lowered its outlook for 2009, saying it now expects “zero growth” for the country, excluding shipping and the key offshore oil and gas industry, rather than the previously expected 1.9 per cent.

According to economists, this “continental” measure is a more accurate indicator of the Norwegian economy as it excludes the large variations in the oil price.

“It will be a challenging year,” Halvorsen said.

Analysts were even more pessimistic than the government and said the government would not escape a recession.

“The package could soften the blow of a recession but not prevent it. According to our estimates, we’re already there,” Handelsbanken analyst Knut Anton Mork told AFP.

In the third quarter, continental GDP was just 0.2 per cent, but figures for the fourth quarter which have yet to be released are expected to be much worse.—AFP