Article from Ministry of Finance

The Budget for 2020 in five minutes

Published

On 18 September 2019, the Government presented its proposed budget for 2020 to the Riksdag.

Photo: Ministry of Finance / Government Offices of Sweden

In the Budget Bill the Government presents its overall proposals for allocating central government expenditure between different activities, and its estimate of expected revenue. The Budget Bill also contains the Government’s assessment of the outlook for the Swedish economy and public finances, and the frameworks this provides for fiscal policy.

The proposals in the Budget Bill for 2020 are based on the January Agreement, the policy agreement between the Swedish Social Democratic Party, the Centre Party, the Liberal Party and the Green Party.

”The problems we have in Sweden today can only be resolved if we take greater joint responsibility for our security and cohesion. In this budget we are taking new initiatives to get more people into work, to strengthen welfare throughout Sweden, to improve pensioners’ finances, to improve the environment and to attain an ambitious climate transition that everyone, in the whole of Sweden, can be a part of. We are substantially increasing resources to improve security and safety,” says Minister for Finance Magdalena Andersson.

Reforms for a stronger society

The Government is proposing measures to increase the number of jobs, tackle the challenge of climate change, safeguard welfare throughout the country and address crime and its causes.

More people in work
Work is the most important condition for being able to earn a living and become established in society, and for financing joint welfare.

Sweden is to be a fossil-free pioneer
The overall goal of environmental policy is to pass on to the next generation a society in which the major environmental problems have been solved without increasing environmental and health problems beyond Sweden’s borders.

Strengthened welfare system
Sweden is to be a modern welfare nation. A high level of employment, universal welfare systems and good order in public finances form the foundation for the Swedish social model.

Growth throughout the country
The whole of Sweden will not only live, but also grow. Rural and sparsely populated areas, as well as small and large urban areas must be developed so that the whole of Sweden’s potential is used. Possibilities to live and work throughout the country will be improved.

Security is to increase and democracy to be safeguarded
The fight against crime and its causes will be intensified. Society must be strong enough to protect people from everything from petty crime to terrorism. This is key to holding society together. Democracy must be safeguarded, both in Sweden and abroad.

Reforms and financing

Reforms and financing in the Budget Bill for 2020 (pdf)

Government’s assessment of the economic outlook

After several years of high growth, there is now a slowdown in the world economy and in Sweden, although resource utilisation in the Swedish economy is still higher than normal. At the same time, several of the risks highlighted by the Government in recent years have increased – for instance, the trade conflict between the United States and China, and the United Kingdom’s withdrawal from the EU.

Key indicator table, forecast September 2019 
  2018 2019 2020 2021 2022
GDP, calendar-adjusted, percentage change 2.5 1.5 1.2 1.7 2.0
Employment, aged 15–74, percentage change 1.8 0.8 0.4 0.6 0.6
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 0.9 0.4 0.3 0.4 1.2
Structural net lending, general government sector, as per cent of GDP 0.0 0.0 0.2 0.5 1.3

Note: GDP components refer to fixed prices
Sources: Statistics Sweden and own calculations

Next step – Riksdag processing of the draft budget

When the Government has presented its draft budget, the Riksdag’s processing begins. This is divided into two stages:

Stage 1: First, the Riksdag adopts the guidelines for economic policy and the economic framework of the central government budget. The framework decision, i.e. the decision on the limits for how large expenditure can be per expenditure area, guides the continued processing in the Riksdag, as the expenditure frameworks cannot be exceeded.

Stage 2: In the second stage, the Riksdag takes a position on allocating expenditure in each expenditure area, in other words how much money (appropriation) different activities will receive. Processing of the Budget Bill is complete when the Riksdag has taken a position on the proposals for all 27 expenditure areas. The Riksdag then finalises the central government budget.

Based on the results of the Riksdag’s processing, the Government decides on appropriation directions for all government agencies and appropriations.