ida wolden bache : norges bank ’ s management of the government pension fund global introductory statement by ms ida wolden bache, governor of norges bank ( central bank of norway ), at the hearing of the standing committee on finance and economic affairs of the storting ( norwegian parliament ), 3 may 2022. * * * i would like to thank the committee for its invitation. norges bank manages the gpfg with the objective of achieving the highest possible return over time within the limits of the investment mandate defined by the ministry of finance. the objective of the highest possible return is to be achieved within an adequate control and risk management framework, in a responsible and cost - efficient manner with a high degree of transparency. the investment mandate is extensive. around 70 percent of the over nok 11 000 billion in the gpfg is invested in equities, which means we are one of the world ’ s largest shareholders. we a minority shareholder in around 9000 companies in 70 countries. in addition, we have a broad portfolio of fixed income investments. some of the gpfg is invested in unlisted real estate, and in 2021, we also invested for the first time in unlisted renewable energy infrastructure. the gpfg is managed to track the benchmark index fairly closely, so that the return largely tracks the return on the benchmark index. the benchmark index is defined by the ministry of finance and endorsed by the storting. however, even though norges bank closely tracks the gpfg ’ s benchmark index, many big and small choices have to be made every day. the executive board is satisfied that the return over time has been higher than the return on the benchmark index against which the gpfg ’ s performance is measured. for 2021, the gpfg ’ s investments earned an overall return of 14. 5 percent before management costs. the return was 0. 74 percentage point higher than the return on the benchmark index defined by the ministry of finance. since the turn of the year, the markets have been affected by russia ’ s invasion of ukraine and higher inflation in many countries. the gpfg ’ s equity and bond investments both fell in value in the first quarter of the year, and the overall return on investments was a negative 4. 9 percent. norges bank ’ s investment management helped to dampen that fall somewhat. the return was 0. 66 percentage point higher than the benchmark

things. but it is increasingly clear that the centre will hold. we have strong institutions, and we have the better arguments. we cannot stop some people from saying populist things, but we can win the policy debates – and we are winning. bad economic outcomes, in this case, seem to be supporting better policies. conclusion in conclusion : this is a difficult moment for emerging markets. after a long run of success, we are now confronting a range of serious challenges, including excessive macroeconomic imbalances, stalled growth and difficult politics. as all of you will know, from your years of experience investing in emerging markets, the asset class is marked by volatility. you are here because the returns can be high, but you also acknowledge that there can be low moments. had you been more riskaverse, you would have the good returns emerging markets offered. in truth, and as has been said in other contexts, we are probably not as good as we look when we are winning, but we are also not as bad as we seem when we are losing. the past few years have been difficult ones for south africa, as for many other emerging markers, but there is a respectable case to be made that things will get substantially better. we can achieve macroeconomic rebalancing that favours investment and growth. we aspire to growth rates nearer our historical trend levels, and once we achieve that, we can get ambitious about faster growth rates. we are recovering from a period of self - inflicted injuries, and there are good growth opportunities that we can exploit when we have recovered our health. our politics have taken a reformist turn, which should permit a constructive response, rather than a destructive reaction, to the disappointments of the recent past. i am confident that south africa tomorrow will be better than south africa today. thank you. page 8 of 8