Sweden announces ‘historic’ 100 billion kronor budget to revive pandemic-hit economy

Sweden announces 'historic' 100 billion kronor budget to revive pandemic-hit economy
Finance Minister Magdalena Andersson noted that the budget was not "free money". Photo: Claudio Bresciani/TT
Sweden's government has allocated more than 100 billion for its 2021 budget in a bid to give the economy a needed boost amid the coronavirus crisis.

“Our starting point is that we are going to put forward a budget that is historic in its scope,” Finance Minister Magdalena Andersson told a press conference on Thursday afternoon.

She did not go into details as to how the 100 billion would be allocated, with the full budget set to be presented in September.

“We will do it through strong investments in more jobs in welfare, care, schools, and of course in the climate,” she said. 

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There was also tentative positive news as the government adjusted its forecasts for how the Swedish GDP will develop.

It is still expected to decline by 4.6 percent this year, with a predicted growth of 4.1 percent in 2021. That's a significant improvement on the previous forecast of a 6 percent drop in 2020 and 3 percent growth in 2021.

“The assessment is that activity in the Swedish economy reached its bottom in April-May, and we have seen a certain recovery. We are now looking a little more positively at the economic situation compared to in June. There is still continued great uncertainty, and obviously it depends how the pandemic develops,” said Andersson. 

Meanwhile, the unemployment rate was projected to reach 9 percent by the end of 2020, to further rise to 9.5 percent next year. This is a slight improvement on the previous forecast of 9.3 percent this year and 10.3 percent in 2021.

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