Sweden in new economic situation

Minister for Finance Magdalena Andersson today presented the Government’s latest economic forecast and the focus of the autumn budget during the Government’s discussions at Harpsund. The Government’s reforms will reduce unemployment next year.

"Sweden is in a new economic situation. We have turned a large deficit to surplus by replacing unfunded tax cuts and cutbacks with joint investments. Sweden's new economic strength will benefit everyone. More people will have jobs and there will be greater security. The strength of public finances will be used to help build our society by employing assistant nurses, child minders, teachers and police officers," says Minister for Finance Magdalena Andersson.

Increased economic growth

Compared with the previous forecast, economic growth for the current year is revised up by 0.6 percentage points to 3.1 per cent. The growth is broad-based, with a continued steady increase in household consumption, investment and exports. Investment in housing construction has shown particularly strong growth.

"Analyses from the National Institute of Economic Research show that the best way to quickly increase economic growth and create new jobs is through initiatives in the welfare system and public sector investment. Our fiscal policy is estimated to have improved growth by approximately half a percentage point per year in 2015–2017," says Ms Andersson.

Government's reforms will reduce unemployment next year

Unemployment is expected to fall further next year to 5.9 per cent. The downward revision is primarily due to the fact that most of the policies that will be presented in the coming Budget Bill are now included. This causes unemployment to be revised down by around 0.4 percentage points next year compared to the spring Budget Bill 2017. The total downward revision of unemployment since this spring is 0.5 percentage points.

"Unemployment shall continue to fall. Everyone who can work should" says Ms Andersson.

The employment rate for the 20–64 age group remains at the highest level since 1992 and the forecast for next year has been revised upwards. The proportion of people who are dependent on sickness insurance, disability pension, unemployment insurance, introduction benefits or income support is the lowest since the early 1990s and is expected to continue to fall.

Strong public finances

General government net lending is higher than what we were able to present in the Spring Fiscal Policy Bill, both for this year and next year. The preliminary reforms are included in this calculation.

"Many people probably expected that we would go down to the new surplus target of 0.33 per cent next year. But that would not be prudent, considering the economic situation – it is important to safeguard public finances," says Ms Andersson.

Focus of the Budget Bill

"The Government's priorities ahead of the autumn budget are clear. Sweden's economic strength must benefit everyone. We will invest in the future, in our children's schools and climate adaptation. More people must have jobs and security must increase. This is more important than unfair tax cuts," Ms Andersson concludes.

Contact

Gösta Brunnander
Press Secretary to Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile 072-544 28 66
email to Gösta Brunnander, via senior registry clerk
Isabel Lundin
Press Secretary to Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile 076-296 46 38
email to Isabel Lundin, via senior registry clerk
Thomas Bergman
Head of Macro Forecasts
Phone +46 8 405 47 18
email to Thomas Bergman, via senior registry clerk
Thomas G Pettersson
Head of the Division for Public Finances
Phone + 46 73 985 08 37
email to Thomas G Pettersson, via senior registry clerk