Economic policy

Today, Minister for Finance Mikael Damberg presents the Ministry of Finance’s latest forecast for the economic situation. The Swedish economy is expected to grow by 4.9 per cent this year, an upward revision of 0.5 percentage points compared with the previous forecast. Sweden’s GDP is back at the levels forecast before the crisis.

In July 2020, EU heads of state and government agreed on a recovery package to mitigate the effects of the crisis. The package, called NextGenerationEU, comprises EUR 750 billion (2018 prices) in loans and grants to Member States. The main part of this will be channelled through the Recovery and Resilience Facility (RRF). On 28 May 2021, Sweden submitted its recovery plan to the EU.

Since the infection started to spread, the Government and the Riksdag have taken a large number of measures to safeguard people’s lives, health and livelihoods. At the same time a powerful green restart of the Swedish economy is being implemented. In all, the economic measures taken are worth almost SEK 400 billion for 2020 and 2021. This corresponds to around SEK 40 000 per inhabitant. In addition, around SEK 1 000 billion has been made available in various forms of loans and guarantees.

The Government is presenting the Budget Bill for 2022 to the Riksdag today. In it, the Government proposes measures to accelerate the climate transition, get more people into work, strengthen the welfare system and make Sweden a safe country for all. In total, reforms worth approximately SEK 74 billion are involved.

The Government on instructed the Swedish Tax Agency and Tillväxtverket (the Swedish Agency for Economic and Regional Growth) to make preparations so that as of 1 April 2022, the Tax Agency can be the managing authority for Tillväxtverket’s currently responsibilities under the Act on aid in the event of short-time work.

Today, Minister for Finance Magdalena Andersson presents the Ministry of Finance’s latest economic forecast and the direction of the central government budget for next year. The Ministry of Finance forecasts growth of 4.4 per cent this year and 3.5 per cent next year.

Discussions on the situation in Russia and how the EU should manage it, along with LGBTIQ issues, dominated the EU summit on 24–25 June. Prime Minister Stefan Löfven and other EU leaders also addressed the COVID-19 situation and the economic recovery.

When the EU’s heads of state and government meet in Brussels on 24–25 June, they will discuss the economic situation in the EU, migration and a number of foreign policy issues. They will also look at activities related to COVID-19. Prime Minister Stefan Löfven and his colleagues will kick off the summit with a working lunch with UN Secretary-General Antonio Guterres.

The Swedish economy is recovering rapidly after the deep downturn last year. The Ministry of Finance’s latest forecast calls for GDP to grow by 4.7 per cent this year, which is 1.5 percentage points higher than in the forecast presented in connection with the Spring Budget in April. Public finances are also expected to be stronger than in the previous forecast.

The government parties, the Centre Party and the Liberal Party have agreed on supporting SAS to access liquidity equivalent to SEK 1.5 billion. This support from the Swedish State is subject to the European Commission’s approval of the measures and corresponding support from the Danish State.

The situation for the travel industry remains serious. Earlier in the pandemic, travellers sometimes accepted replacement holidays instead of a refund when package tours were cancelled due to the outbreak. Many of these replacement holidays are now also being cancelled. The Government is therefore working on a proposal that will give package tour operators the option of taking government loans to refund money to travellers. The proposal is based on an agreement between the government parties, the Centre Party and the Liberal Party.

The Stability and Growth Pact is a set of rules for coordinating fiscal policy between EU Member States. The purpose of these rules is to ensure sound public finances. Every April, Member States are to submit stability and convergence programmes. Sweden and other Member States that have not adopted the euro submit convergence programmes, whereas Member States that have adopted the euro submit stability programmes. The programmes are used by the Commission and the Council in their assessment of Member States’ fiscal policies and situations.

Today the Government presents the guidelines for economic policy and the Spring Amending Budget with further measures to limit the spread of the virus and alleviate the consequences of the pandemic for the economy and also to work Sweden out of the crisis. The proposals presented in connection with the Spring Fiscal Policy Bill total almost SEK 45 billion. The proposals are based on an agreement between the government parties, the Centre Party and the Liberal Party.

Resilience in the Swedish economy is strong and the recovery will gather strength in the second half of 2021. As activity increases, the labour market will also gain strength. Despite this, the situation remains serious, especially for those whose position in the labour market is weak. This is clear from the Ministry of Finance’s most recent forecast, presented today by Minister for Finance Magdalena Andersson.

On 8 april the Government adopted an ordinance on rent rebates for certain vulnerable sectors for the period 1 January–31 March 2021. The adopted ordinance means that the rebate scheme enters into force and can be applied for as of 3 May. The decision follows directly from the approval of the rebate scheme by the European Commission last week and is based on an agreement between the governing parties, the Centre Party and the Liberal Party.

The Government today decided to introduce turnover-based support for trading partnerships in which at least one partner is a natural person. This support covers the period March 2020–February 2021 and can be applied for as of 29 March. Turnover-based support for trading partnerships is based on an agreement between the government parties, the Centre Party and the Liberal Party.

To mitigate the economic impact of the increasing number of COVID-19 cases, the Government has proposed that the State aid in support of certain commercial tenants receiving a rent rebate – introduced in spring 2020 – be reintroduced for a three-month period, January–March 2021. Today, the Government notified the support to the European Commission for approval. The Government intends to adopt the legal framework as soon as the support is approved by the Commission.

The Government previously announced that turnover-based support for sole traders would be extended until the end of April 2021. Today, the Government can announce that in connection with the extension of the turnover-based support for sole traders, a possibility will be introduced for sole traders who have received unemployment benefit during the support period in their application and sole traders who have taken parental leave or sick leave during the reference period to also access the extended turnover-based support.