Norway’s sovereign wealth fund suffers historic losses of $164 billion
Norway’s national wealth fund reported a record loss for the entire year of 2022 of 1.64 trillion Norwegian kroner ($164 billion), blaming “very unusual” market conditions.
The alleged Government Pension Fund Global, one of the biggest investors in the world, reported a -14.1 per cent return for the year, which it claimed was 0.88 percentage points higher than the return on its benchmark index.
“The market was impacted by war in Europe, high inflation, and rising interest rates. This negatively impacted both the equity market and bond market at the same time, which is very unusual,” Norges Bank Investment Management CEO Nicolai Tangen said in a statement.
“All the sectors in the equity market had negative returns, with the exception of energy,” Tangen said.
In 2008, during the height of the global financial crisis, the fund suffered its previous biggest loss of 633 billion kroner.
To invest the excess funds from Norway’s oil and gas sector, the $1.3 trillion fund was formed in the 1990s. Over 9,300 companies in 70 different nations have benefited from the fund’s investments thus far.
The wealth of the fund is anchored on Norway’s enormous North Sea oil and gas deposits. In fact, a fervent discussion on international justice has been sparked by the nation’s unprecedented growth in fossil fuel earnings amid Russia’s war in Ukraine.
The government has been urged to lead by investing its record petroleum profits in a new worldwide solidarity fund by opposition lawmakers, well-known economists in Norway, and even the country’s energy industry’s giants.
The foreign ministry of Norway has stated that it is well conscious of the responsibilities associated with its energy resources.
(With inputs from agencies)