The 2019 Spring Budget in five minutes
On 10 April, the Government presented the Spring Fiscal Policy Bill to the Riksdag. In the Spring Fiscal Policy Bill, the Government presents its assessment of the state of the economy and the direction of economic policy for the coming year. The Government’s proposed amendments to this year’s budget are presented in the Spring Amending Budget.
The Spring Fiscal Policy Bill and the proposals in the Spring Amending Budget are based on a policy agreement between the government parties, the Centre Party and the Liberal Party.
Last autumn, a transitional government presented a Budget Bill to the Riksdag for the first time in history. The draft budget was based on the budget for 2018, adjusted in accordance with a number of principles presented by the transitional government following contact with five other parties represented in the Riksdag. But the Riksdag did not adopt that proposal, adopting instead a budget proposed by the Moderate Party and the Christian Democrats. And it is this budget that forms the basis of the Spring Amending Budget.
This is the first budget since the January Agreement was concluded between the Social Democratic Party, the Centre Party, the Liberal Party and the Green Party.
“Using the January Agreement as the foundation, we are now building change that is sustainable over time. We want to create conditions for a society where cohesion and security go hand in hand with people’s freedom and opportunities. This is how we will move Sweden forward,” says Minister for Finance Magdalena Andersson.
Proposals the Government will implement this year
In the Spring Amending Budget, the Government presents a number of different proposals for more jobs, initiatives to tackle climate change, strengthen welfare and enable all of Sweden to grow. All told, the Government is proposing new reforms amounting to SEK 4.5 billion.
As usual, the reforms in the Spring Budget deal with unavoidables, but also with implementing the January Agreement. Since some activities received more funds than they needed when the transitional government based its proposals on the agreed principles for last autumn’s budget, the Spring Budget also contains expenditure cuts.
|More people in work||1.1|
|Strengthened welfare system||0.9|
|Growth throughout the country||0.5|
|Sweden a fossil-free welfare nation||2.0|
|Source: table 1.1 2019 Spring Fiscal Policy Bill|
More people in work
Work is the most important prerequisite for earning a living and becoming established in society. A high level of employment is also the foundation of our common welfare system. The employment rate in Sweden is the highest in over 25 years and the highest in the EU. Despite this positive trend, there are still major problems in the labour market.
Strengthened welfare system
Sweden will continue to be a leading welfare nation. A well-designed universal and tax-financed welfare system is important for equalising people’s living conditions and contributing to equity and gender equality.
Growth throughout the country
Our policies must benefit the entire country. Rural and sparsely populated areas, as well as small and large urban areas, must be able to develop.
Sweden a fossil-free pioneer
The overall objective of environmental policy is to be able to pass on to the next generation a society in which the major environmental problems have been solved. Sweden will lead the way in climate and environmental action.
Government’s assessment of the economic outlook
The economic situation has improved in Sweden in recent years and growth has been high. However, in recent times there have been several indicators to suggest that economic development has dropped somewhat, which suggests that growth will slow in 2019.
The labour market remains strong and the forecast for unemployment has been reduced slightly, which is due to the strong outcome of the fourth quarter of 2018.
However, the United Kingdom’s withdrawal from the EU, US trade policy and uncertainty in the Swedish housing market mean that there is a risk of development being weaker than expected.
|GDP, calendar-adjusted, percentage change||2.4||1.6||1.4||1.5||2.0|
|Employment, aged 15–74, percentage change||1.8||1.3||0.2||0.6||0.7|
|Unemployment, as per cent of labour force aged 15–74||6.3||6.3||6.4||6.4||6.5|
|General government net lending, as per cent of GDP||0.7||0.6||0.7||1.1||1.9|
|Structural net lending, general government sector, as per cent of GDP||0.1||0.2||0.5||1.0||1.9|
|Note: GDP components refer to fixed prices|
|Sources: Statistics Sweden and own calculations|
Passage through the Riksdag
After the Spring Fiscal Policy Bill and the Spring Amending Budget have been presented to the Riksdag, the members of the Riksdag have two weeks to present motions, with alternative proposals, in response to the Bill. Proposed guidelines for economic policy and budget policy included in the Spring Fiscal Policy Bill are processed by the Committee on Finance. The proposed amending budget, including changes in appropriation frames, revenue estimates and any legislative proposals, is also processed by the Committee on Finance.
The Riksdag will take a decision on the budget bills in June, preliminarily on 18 June 2019.