Sweden’s budget surplus increases

The Swedish central government budget is expected to show a full year surplus of 138 billion kronor in 2007, compared with a surplus of 18.373 billion kronor in 2006, the Swedish National Debt Office (SNDO) said.

The SNDO’s latest forecast for the year is 26 billion kronor higher than its last full year forecast in February.

“The difference is primarily due to larger tax revenue than expected,” it said.

In full year 2008 the SNDO sees tax cuts and “some slowdown in economic activity” reducing the surplus to 118 billion kronor.

Both the 2007 and 2008 forecasts include income of 50 billion kronor a year from divestments of state holdings.

“The expected sales income means that the uncertainty of the forecast is greater than usual,” said SNDO.

Central government debt is seen decreasing to 1.124 trillion kronor by the end of 2007, and to 1.006 trillion kronor by the end of 2008, corresponding to 37 percent and 32 respectively of GDP.

SNDO said the larger surplus means that borrowing will be reduced, with the issue volume in nominal government bonds seen decreasing to 1.5 billion kronor per auction from June 27.