More Tax Cuts in New Budget

The Swedish center-right government presented its new budget Monday. As previously announced, it includes continued tax cuts.

Radio Sweden examines the reforms and discusses the impact of the current world financial crisis on Sweden. What are the governments plans for the country’s economy? And will it save them from slipping even further behind in the polls?

The government has raised its inflation forecast for this year to 3.8 percent, but cut the prediction for 2009 to 2.4 percent. Unemployment is expected to rise faster than earlier forecasts, with less growth than predicted.

The business organization Swedish Enterprise says the budget provides a welcome injection to stimulate the economy. The white collar workers union TCO is positive to a planned reduction in unemployment insurance fees, but thinks the surplus should be used to carry out reforms when the economy worsens. Sweden’s national student union criticises the budget for not spending enough on education.

The opposition Social Democrats say the government has missed its opportunity to protect Swedish growth during the coming downturn in the economic cycle.

In two weeks the Social Democrats will be presenting their shadow budget, which according to press reports will include plans for almost 100 million dollars over three years to improve daycare and preschools.