Norway Mulls Action to Counter Oil's Plunge

The Norwegian prime minister is preparing measures for next year's budget to counter the economic downturn and risk of a crisis after the collapse in prices for its oil exports, business daily Dagens Naeringsliv (DN) said on Thursday.

"The overall situation for the Norwegian economy is not that bad. But it is not enough to counter the fall from oil and gas... We are now assessing further measures," Prime Minister Erna Solberg told DN.

The Norwegian offshore oil and gas sector generates about a fifth of Norway's gross domestic product (GDP).

The government predicted in May that the budget would lose more than $10 billion in energy income and unemployment would hover around 10-year highs both this year and next as investment levels were set to fall.

Solberg told DN that the pressure on Norway's economy was bigger than first estimated.

Even though global oil prices have climbed almost 30 percent from six-year lows last January, prices still remain at about half of their June 2014 peak.

According to DN the government would propose cuts in corporation tax this autumn in connection with its wider tax reform.

Reporting by Stine Jacobsen