Borg unveils budget amid slow growth fears

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.

Borg unveils budget amid slow growth fears

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.

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Sweden boosts spending on civil defence in spring budget

Sweden is to channel a further 800 million kronor to local government and other organisations to bolster Sweden's civil defence capabilities, the country's finance minister has announced.

Sweden boosts spending on civil defence in spring budget

The new funding, which will go to municipalities, regional government, and other organisations, was announced of part of the country’s spring budget, announced on Tuesday. 

“This will strengthen our ability to resist in both war and peace,” Sweden’s finance minister, Mikael Damberg, said in a press conference. “If the worst happens, it’s important that there is physical protection for the population.” 

The government is channelling 91m kronor towards renovating Sweden’s 65,000 bomb shelters, and will also fund the repair the country’s network of emergency sirens, known as Hesa Fredrik, or Hoarse Fredrik, many of which are currently out of order. 

A bomb shelter in Stockholm. Sweden’s government is spending 800m kronor in its spring budget to boost civil defence. Photo: Anders Wiklund/ TT

Sweden’s Social Democrats are currently ruling on the alternative budget put together by the right-wing opposition, making this spring budget, which makes changes to the autumn budget, unusually important. 

The budget includes extra spending of some 31.4 billion kronor (€299m), with 500m kronor going to extra spending on healthcare,  and 10.3 billion kronor going towards supporting Ukrainian refugees, of which nine billion will come from the aid budget. 

The spring budget also includes the so called “pension guarantee bonus”, or garantitillägg, which will see four billion kronor (€390m) going to those with the lowest pensions. 

The bonus, which was the price the Left Party demanded for letting Magdalena Andersson take her place as prime minister, risks being voted down by the right-wing parties in the parliament.