sovereign wealth funds

• explain

  • large pools of money that a government invests for the benefit of its economy and citizen
  • they come from:
  • budget surplus -> when government spends less than it earns
  • natural surplus -> revenue from exporting resources like oil and minerals
  • trade surplus -> when a country exports more than it imports
  • becomes important players in global finance, investing in various international business and assets
  • this helps them to diversify their economies and reduce dependence on a single source of income
• example

  Norway and Saudi Arabia (oil) have significant SWFs