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Borg unveils budget amid slow growth fears

Borg unveils budget amid slow growth fears

Published: 20 Sep 2012 08:11 GMT+02:00
Updated: 20 Sep 2012 08:11 GMT+02:00

Despite a stable Swedish economy, Finance Minister Anders Borg fears that the country’s growth may prove weaker than the government has hoped for in the budget, set to be presented on Thursday.

Sweden’s economy is expected to expand this year, with the GDP growing by 1.6 percent. For next year, an increase by another 2.7 percent has been predicted.

According to a report from national broadcaster Sveriges Radio (SR), the government believes that the finances will start recovering next year, with a growth of 3.7 percent by 2014.

Unemployment is also expected to drop from 7.5 percent next year to 6.7 percent in 2014. The government is nevertheless counting on a running deficit in the state finances this year and next, but for 2014 they are predicting a surplus of 0.3 percent.

National debt will grow to 31.3 percent of the GDP this year before beginning to decrease.

According to news agency TT, these figures are more or less the same as the finance minister presented a few weeks ago.

However, in an opinion piece in daily Dagens Nyheter (DN) on Thursday, Borg wrote that there is a risk that predictions for the budget that will be presented later on Thursday won’t hold up.

“The combination of weak banking systems and fragile state finances in several countries within the eurozone makes the risk of a less favourable growth rate seem more likely than the headline scenario,” Borg wrote.

No great surprises are expected when Borg presents the government’s budget to the Riksdag.

Most of the government’s new ventures, totaling some 23 billion kronor ($3.5 million) from the budget, are already known, such as investing into infrastructure, cutting corporate taxes, creating more places at Swedish universities as well as more money to research and a boosted labour market policy for Sweden’s younger population.

“Sweden’s strong position can accommodate forceful investment into Sweden’s future that will provide energy into the economy while the international finances weaken,” Borg wrote.

According to TT, Borg risks being accused of being too optimistic in the Riksdag debate following the budget presentation, as the Social Democrats are not only critical of the government's labour policies but have also started to question whether the government can really afford all their new ventures.

The Local/rm (news@thelocal.se)

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Your comments about this article

13:42 September 20, 2012 by Abe L
Where are the cuts to income tax rates and VAT? That would allow for additional consumer spending which directly translates to business growth and jobs.
09:42 September 21, 2012 by Twiceshy
Abe L judging from what restaurants did, I wouldn't be so sure that VAT cuts help increase consumer spending.

OT: Amid the Eurozone problems, China's economy slowing down and continued problems in the US, those GDP/unemployment predictions look very optimistic.
16:42 September 21, 2012 by smilingjack
its laughable. 2 major firms have gone bankrupt in todays news. your interest rates are very low. the USA is finished and China is getting payback for being screwed over for so long. they own 3/4 of australia, great big chunks of the rest of the world - like saab - and are about to buy greece with loose change. take it all with a grain of salt. unemployment up. crime up. taxes up not down.

its always just give us 2 more years and things will get better.

still I dont think your royal family will suffer cut backs.
10:25 October 1, 2012 by Ale Komvux
Finance Minister Anders Borg fears that the country's growth may prove weaker than the government has hoped for in the budget; they always Swedish politicians bet that Sweden must be at the top level of talk. But they do not have the ability to do what they say. The democracy in the country all the workers want to work six hours per day on daily workaday. And receive a full charge. It would procure more jobs in the country, but the country is anxiously to Sweden Riksbank will raise interest rates. But it is not the unemployment number one priority if the country wants to create more jobs for the unemployed, the country must invest in more BN.P. There accident consequences. But you have to be against it. It's strange that they can show BNP growth of future. a state can bring in much more than 100% of bnp in one year. it's just that quickly take in and quickly send money again nothing of a public sector is too big or too little. Unemployment is also expected to decline, but who is it that guarantees us. It is a view how it will look in the future. Hope that the 23 billion will be in the right hands. International economy weakened product position in site what it is reasonable to do.
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