Swedish government announces 2022 budget ‘to take Sweden forward’

Swedish Finance Minister Magdalena Andersson presented the government's budget proposal today, including a raft of initiatives to the tune of almost 75 billion kronor.

Swedish government announces 2022 budget 'to take Sweden forward'
Finance Minister Magdalena Andersson unveiled the budget which contains reforms aimed at boosting employment, fighting the Covid-19 pandemic and protecting the environment. Photo: Anders Wiklund/TT

The total amount being spent on new reforms is less than last year’s record-breaking 105 billion kronor, which Andersson described as a “historic” budget at the time, with a focus on coronavirus-related measures. 

The pandemic’s impact is also clear from this year’s budget, with a total of 9.6 billion kronor set aside for initiatives linked to the pandemic. That includes 3.5 billion for purchasing more vaccine doses, 2.1 billion to help the healthcare sector carry out vaccinations, and a 2 million kronor boost for testing and contact tracing efforts, for example.

“This is a budget to take Sweden forward after the pandemic,” said Andersson as she announced the measures.

Some of the budget’s content had already been presented over the past few weeks, but there were some new details.

One such measure was the confirmation of the introduction of a so-called ‘family week’, an extra six days of paid leave for parents of children aged between four and 16, set to be introduced from April 2022. This is estimated to cost 3.5 billion kronor.

Another measure announced on Monday was additional investment to support the healthcare sector, including 2 million aimed at reducing queues for treatment as a result of the pandemic and 2 million to increase staff in the sector.

Between 10 and 12 billion kronor goes to climate and environmental initiatives (depending on how these are defined) including public transport, electric buses, and support for Swedish forests. Money will also be invested in fighting crime, with 2.5 billion going to police, technology, and CCTV.

“The climate is and remains the key issue of our time,” said the Finance Minister. “It is extremely clear that we need to do more to reduce our emissions to reach the climate goals we have set.”

The budget also includes 10 billion kronor to cover tax cuts, primarily for low- and middle-income earners, but also for people on sickness and disability benefits and for members of Sweden’s unemployment insurance funds.

The big question now is whether the government will be able to get its budget voted through by parliament.

After the government’s post-election deal with the Centre and Liberal parties collapsed earlier this year, the most likely route for the minority government to get its proposals passed is with the support of both the Centre and Left parties.

The Local will publish a full explanation of what the budget bill means for international residents later today.

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Sweden facing ‘the highest inflation in 30 years’

Sweden last month saw the highest levels of inflation in more than 30 years, according to the latest figures from Statistics Sweden.

Sweden facing 'the highest inflation in 30 years'

Consumer prices rose 6.4 percent in April, the agency reported in its latest monthly figures, well ahead of the 6.1 percent rise predicted by analysts and up from 6.1 percent in March. 

“This shows high inflationary pressure. It’s in line with consensus, but it’s 0.2 percentage points higher than what the Riksbank has been predicting,” said Olle Holmgren, an economist with SEB. 

Rising prices of meat, vegetables and other groceries were the main reasons for the rise, with the prices of electricity and fuel falling month-on-month. If energy prices are excluded, inflation was 4.5 percent in April, up from 4.1 percent in March. 

“Restaurant prices are rise quite a bit for the second month in a row. That can be linked to grocery prices,” Holmgren said. “Then there are higher prices generally, but grocery prices are increasing rapidly.”

Holmgren predicted that the inflation rate could continue to rise in the coming months, increasing the risk that Sweden’s public bank, the Riksbank, will hike interest by 0.5 percentage points — two slots — in September. 

Fuel prices fell in April compared to March, although diesel remains 56.7 percent higher than a year ago and petrol 36 percent higher. 

The price coffee is higher now than at any time since it joined the consumer price index in 1983, after rising 29 percent so far this year. 

Other groceries which have risen significantly in price this year are cabbage and tomatoes, which rose in price by 43 percent ad 33 percent respectively. 

The price of avocado has fallen by 14 percent this year, while pickled herring has fallen in price by 16 percent.