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Sweden projects budget surplus

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13:08 CEST+02:00
Sweden is expected to post a 2008 budget surplus of 163 billion kronor ($25 billion dollars) despite the global economic slowdown, the Swedish budget authority ESV said Wednesday.

"The economic climate has deteriorated markedly, with significant consequences for central government finances," ESV said in a statement.

These "will nevertheless be strong, with substantial budget surpluses and net lending throughout the forecast period."

Of the 163 billion, 88 billion kronor is due to non-recurring effects, including 50 billion from the sell-off earlier this year of state-owned liquor manufacturer Vin & Sprit and 25 billion from the sale of property group Vasakronan.

The budget surplus was expected to decrease by 100 billion next year to 62.2 billion, before growing again to 88.7 billion in 2010 and 122.5 billion in 2011, ESV predicted.

The agency had previously forecast a surplus of 150 billion for this year, 90.2 billion for 2009, 107.9 for 2010 and 152.2 for 2011.

"The substantial budget surpluses mean that central government debt will decrease, albeit at a slightly decreasing rate relative to the previous forecast," the agency said.

"The debt-to-GDP (gross domestic product) ratio is forecast to be 19 percent in 2011, down substantially from 30 percent this year," it added.

ESV, a central administrative agency under the finance ministry, analyses and makes forecasts of central government finances.

On August 22, Sweden's centre-right government slashed its growth forecasts for the coming years but said the country was still well-positioned to ride out the global economic slowdown.

Sweden's economy, which registered growth of 2.6 percent in 2007, came to a full halt in the second quarter, when it registered zero growth, Statistics Sweden announced last month.

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