Oslo- Norway on Monday launched an economic package totalling 20-billion-kroner (2.9 billion dollars) to counter the effects of the global downturn and growing unemployment.

Finance Minister Kristin Halvorsen told parliament the package was to "contribute to sustainable growth" and described it as "the most ambitious fiscal stimulus" in over 30 years.

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

Some 16 billion kroner were earmarked for budget expenditures and 3.2 billion kroner for tax cuts for businesses, the government said.

Unemployment was this year estimated to increase by 1 percentage point to 3.5 per cent, but could grow even higher.

Norway was also to allow the budget deficit to grow by 7 billion kroner and would draw on more of its income from oil and gas, the government said.

Weaker demand, both in Norway and abroad, impacted "a wide range of businesses," Halvorsen said.

Oslo was February 9 to present further proposals to ease the credit supply. Earlier, the central bank has lowered its key interest rate to 3 per cent.

Norway is to hold elections in September. (dpa)