Sweden close to budget balance
(Thomson Reuters ONE) -
Swedish central government finances are approaching balance already this year,
as the economy recovers more quickly than expected. Increased tax revenue and
lower expenditure for unemployment contribute to a reduction in the budget
deficit in 2010 and a further decrease next year. The smaller deficits lead to a
reduction in central government borrowing.
The Debt Office's new forecast indicates a budget deficit of SEK 14 billion in
2010 and SEK 8 billion in 2011. This is a reduction of SEK 39 billion and SEK
28 billion compared with the previous forecast. Excluding on-lending, the budget
is practically balanced.
The reduced deficit in 2010 compared with the previous forecast is mainly
explained by increased tax revenue. At the same time, unemployment benefit
disbursements will be lower. The reduction of the deficit in 2011 is mainly due
to an increase in tax revenue apace with the economic recovery.
There are clear indications that the economic recovery has strengthened. Many
businesses have reported rising demand while unemployment has increased less
than expected. However, the macroeconomic assessment is more uncertain than
usual, since it is difficult to assess the further development of the debt
crisis in Europe.
Reduced borrowing in all types of debt
The unexpectedly strong development of central government finances has led to a
decrease in the borrowing requirement. The Debt Office is therefore reducing
borrowing in all types of debt compared with the March forecast. Central
government borrowing, including refunding of maturing loans, is expected to
total SEK 105 billion in 2010 and SEK 100 million in 2011.
The issue volume in nominal government bonds will be reduced from SEK 3 billion
to SEK 2.5 billion per auction from 18 August. The stock of T-bills will shrink
from an estimated SEK 120 billion to an average of SEK 105 billion this year and
SEK 85 billion next year. Borrowing in foreign currency bonds will also be
somewhat smaller.
Borrowing in inflation-linked bonds will remain at SEK 9 billion in 2010 but
decrease to SEK 6 billion in 2011. The Debt Office will introduce a new
inflation-linked loan this autumn maturing in 2017.
Central government debt remains below 40 per cent
The central government debt will be SEK 1,190 billion at the end of 2010 and SEK
1,178 billion at the end of 2011, corresponding to 37 and 36 per cent of GDP.
Central government debt including the Debt Office's financial assets in foreign
currency is estimated at SEK 1,085 billion at the end of 2010 and SEK 1,073
billion at the end of 2011. This corresponds to 34 and 32 per cent of GDP.
Further information can be obtained from:
Sofia Olsson, budget forecast, +46 8 613 47 30
Magdalena Belin, funding, +46 8 613 52 28
[HUG#1424139]
Central Government Borrowing 2010:2: http://hugin.info/133745/R/1424139/372837.pdf
Unternehmensinformation / Kurzprofil:
Datum: 16.06.2010 - 09:31 Uhr
Sprache: Deutsch
News-ID 22525
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