Press release from Ministry of Finance

Restart package for the Swedish economy – more than SEK 100 billion in the budget for 2021

Published

Minister for Finance Magdalena Andersson today presents the Ministry of Finance’s latest economic forecast and the focus of the autumn Budget Bill.

The pandemic and its impacts have dramatically changed the economic outlook in Sweden and the rest of the world. This year, GDP is expected to fall sharply worldwide. At the same time, it appears that activity in the Swedish economy bottomed out in the spring and recovery has now begun. In Sweden, GDP is estimated to fall by 4.6 per cent this year, which is slightly less negative than the Ministry of Finance’s June estimate.

Historic budget

“We can see signs of a recovery even though Sweden’s economic situation remains very serious. There’s a great deal of uncertainty about how the pandemic will play out, and recovery may be protracted. The Government is now beginning to shift from temporary crisis-response policies to investments to get the wheels turning again and create new jobs. To pull Sweden out of the recession as quickly as possible, we need to restart our economy. That’s why we are presenting a historic budget that includes proposals worth more than SEK 100 billion,” says Minister for Finance Magdalena Andersson.

Labour market developments and public finances

As for developments in the Swedish labour market, both employment and employment rates are expected to fall this year, but short-term lay-offs are thought to have cushioned the fall in employment as companies can retain staff to a greater extent.

Labour force participation is also expected to decline, but less than the employment rate and only temporarily. This is estimated to result in 9 per cent unemployment this year and 9.5 per cent next year.

The deep recession means severely weakened public finances, partly due to lower tax revenues and partly to fiscal policy measures in response to the crisis. Compared with the assessment in June, general government net lending for 2020 has been revised upwards by about two percentage points, as the number of lay-offs is expected to be lower and the economy somewhat stronger than anticipated. For 2021, the restart package of more that SEK 100 billion has been included in the calculations and net lending is thus estimated to be -3.3 per cent. Public sector debt is estimated to rise to 42.9 per cent of GDP this year.

“We will now use the collective economic strength that we have built up to restart the Swedish economy. Sweden entered this crisis with the lowest national debt since 1977. With powerful public investments in welfare and climate transition, we will get the whole of Sweden into work and work our way of this crisis,” says Ms Andersson.

Press contact

Mirjam Kontio
Press Secretary to the Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 73 074 05 57
email to Mirjam Kontio
Johan Ekström
Press Secretary to the Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 73 086 32 01
email to Johan Ekström
Karine Raoufinia
Head of the Macroeconomic Forecasting Division
Phone +46 8 405 96 21
email to Karine Raoufinia, via senior registry clerk
Thomas Bergman
Head of the Division for Public Finances
Phone +46 8 405 47 18
email to Thomas Bergman, via senior registry clerk