Borg: economy will continue to strengthen

The Swedish economy will continue to strengthen in coming months, Finance Minister Anders Borg has said. But he also warned that there remained risks to global economic stability.

Speaking during a government meeting at Rosenbad, the prime minister’s offices, Borg reminded journalists that markets were often quiet during the summer, but that things could change in the autumn.

“Concern for Spain’s banking system remains, and for public finances in southern Europe,” he said. He also pointed to signs that the US recovery was weakening.

But Borg added that things were looking better on the home front. He said the latest GDP figures and unemployment statistics were better than the government had expected earlier in the summer.

The unemployment figures, compiled by Statistics Sweden (SCB), show the jobless total has hit 9.5 percent. But the government points to seasonally adjusted figures of 8.1 percent. This means unemployment actually fell from 8.8 percent in May, Borg said.

“But unemployment just over 8 percent is not something you can be pleased about. This is the biggest challenge of the election campaign,” he said.

New government economic predictions are set to be released within the next two to three weeks. These predictions will make it clearer for political parties the amount of money they can spend on tax cuts or spending increases. In early July, Borg said that there would be 10 billion kronor extra to spend in 2011. He declined to say whether that figure could now be increased in the light of improving economic indicators:

“But I feel more confident than earlier in the summer that we have room to make reforms in 2011 and further into the future,” he said.

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