Oslo- The Norwegian government Friday said it would expand its fiscal stimulus package as Prime Minister Jens Stoltenberg said the end of the economic downturn was not in sight.

"I don't think we have completely realized the dramatic events that are unfolding," Stoltenberg said at a meeting of his Labour Party.

Citing continued job losses in the United States, Stoltenberg said the "crisis has not bottomed" adding that it impacted the whole world.

The government last month presented an economic package totalling 20-billion-kroner (2.9 billion dollars) to counter the effects of the global downturn and growing unemployment.

After comments and input, the package was to be expanded including greater write-offs for investments in equipment and extending the period for temporarily laying off workers, Stoltenberg said.

Parliament's finance committee was to discuss the package next week.

The opposition and business leaders on the whole welcomed the expanded package.

Stoltenberg, Finance Minister Kristin Halvorsen and Transport and Communications Minister Liv Signe Navarsete were Sunday due to present further measures to ease credits to households and industries.

Halvorsen and Navarsete lead the two other parties in the ruling red-green coalition.

The government has forecasted zero growth this year - while the budget in October 2008 had estimated the economic growth at 2 per cent.

This week the central bank lowered its key interest rate to 2.50 per cent.

Norway is to hold elections in September. (dpa)