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.