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OSLO, Norway (AP) -- Norway's center-left government on Friday proposed a 2008 budget that calls for boosting climate change incentives and spending slightly more of its vast oil wealth than it did this year. Finance Minister Kristin Havlorsen unveiled the plan to spend 771 billion kroner ($143 billion) in 2008 -- a 7.6 percent increase from this year's budget. The plan calls for spending more of its oil-wealth funds, but still less than it could under a parliamentary guideline -- which is meant to keep the economy from overheating. "The Norwegian economy has had four years of extremely high growth," Havlorsen said. "We must ensure that the positive developments are not undermined by stronger growth in cost levels." Opposition parties and business leaders still criticized the budget as too expansive at a time when Norway's economy is already booming. Nevertheless, it was likely to pass with few changes, as the coalition government holds a parliamentary majority. The Nordic country of 4.6 million people is a major exporter of oil and natural gas, and sets aside much of its surplus oil wealth in a fund currently worth about 2 trillion kroner ($370 billion). Parliament adopted a guideline that the government should spend no more than 4 percent of the expected return on the fund. Havlorsen said the proposed budget increases use of oil revenues, but that the amount has been held to 3.7 percent of the expected oil fund return, or about 7 billion kroner ($1.3 billion) less than the guideline allows. The budget projects revenues of 1.04 trillion kroner ($192 billion), up 2.7 percent from 2007, for a surplus of 344 billion kroner ($64 billion), including returns from investments -- an 8 percent decline from this year. Havlorsen said another key budget area was the "battle against the climate threat," including more funds to buy climate quotas abroad, increased emissions taxes on domestic air travel and revisions to taxes and fees on vehicles to encourage use of environmentally friendly transit. Key economic projections for 2008 include: gross domestic product growth of 3.1 percent, down from 3.5 percent in 2007; private consumption growth of 3.5 percent, after 6 percent this year; inflation of 2.5 percent, up from 0.5 percent this year, and unemployment unchanged at 2.5 percent. Finn Bergesen, head of the Confederation of Norwegian Enterprise, the nation's largest employer's group, criticized the proposed spending increase when the economy is already on the verge of overheating.
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