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Government: We've got SEK 40 billion extra to spend

The government is gathered for its traditional conference in the country home of Harpsund.
The government is gathered for its traditional conference in the country home of Harpsund. Credit: Anders Wiklund/TT

The surplus in the public finances will allow for several new reforms, according to Finance Minister Magdalena Andersson, who estimates an extra SEK 40 billion spending in the budget for next year.

The government has already promised an extra SEK 2.7 billion to defence, another SEK 2 billion to the police, and another SEK 5 billion to welfare and schools. Pensioners have also been promised lower taxes, to bring their tax levels down to the same as people with salaries, who were given tax rebates by the previous government. That is expected to cost approximately SEK 2.2 billion.

But these, and other promises, do not mount up to even half of the SEK 40 billion that Magdalena Andersson talked about at a press conference on Thursday.

"Exactly," said Andersson, when this was pointed out. She added that the government has several more proposals in the pipeline, which will be part of next year's budget, which will be presented in full on the 20th of September.

At the press conference, Andersson painted a very bright picture of the Swedish economy. GDP is now expected to go up by 3.1 per cent this year, and another 2.5 per cent next year, before cooling down to 2 per cent growth in 2019. It is the growth in consumption and a strong increase in the number of houses being built that is behind the strong figures, according to the finance minister.

The government projects that unemployment in Sweden will fall to 5.9 percent next year. This is more optimistic than other forecasters, but Magdalena Andersson told Swedish Radio that this is because they did not include the government budget proposals in their calculations. She believes that with these new budget measures the unemployment numbers in Sweden will drop.

"This is partly due to the strength of the economy and partly because the government's policies are starting to take effect," she said.

Annika Winsth, head economist at Nordea, told Swedish Radio that the government may be tempted to project overly positive unemployment numbers prior to next year's election.

And the financial spokesperson of the biggest opposition party in parliament, Ulf Kristersson of the Moderates, called it "a pure election budget".

"I share the picture that the economy is going well. But when the government spends 40 billion next year in reforms that have not been funded, and the National Institute of Economic Research and others are talking about 12 billion, you have to see it as a pure election budget," he told the news agency TT.

The next election is scheduled for September next year.

Our journalism is based on credibility and impartiality. Swedish Radio is independent and not affiliated to any political, religious, financial, public or private interests.
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