Larger budget surplus this year turns into deficit in 2017
(Thomson Reuters ONE) -
A strong Swedish economy coupled with some temporary effects lead to a central
government surplus of SEK 41 billion this year, according to a new forecast from
the Debt Office. The surplus turns into a deficit of SEK 42 billion next year as
some of the temporary effects wane. The total borrowing requirement for the two
years is lower than in the previous forecast, leading to a reduced issue volume
of government bonds.
- Continued high consumption, a strong labour market and higher capital gains
help strengthen the budget balance this year, although the surplus is also
explained by temporary factors such as deposits of savings in tax accounts, a
discount on the EU contribution and historically low interest rate payments,
says Director General Hans Lindblad. The Swedish economy will grow at a strong
pace this year and slow down gradually as resource utilisation in the economy
rises.
The Debt Office expects Swedish GDP growth of 3.2 per cent in 2016 and 2.2 per
cent in 2017. The slowdown in economic growth will start affecting central
government finances towards the end of the forecast period.
The turnaround in the budget balance between 2016 and 2017 comes partly because
deposits of savings in tax accounts are expected to decrease as the tax account
interest rate is cut to zero. The lowered interest rate should also result in
taxpayers requesting repayments of parts of their deposits. Central government
tax income is also reduced by lower capital gains and larger outgoing payments
of local government tax. On the expenditure side, government grants to local
authorities and the EU contribution will increase next year.
Changes compared with the previous forecast
The budget surplus for 2016 is SEK 39 billion larger than in the previous
forecast from February. The increase is partly due to higher capital gains for
households and higher consumption-based tax income, but it is also an effect of
tax accounts being used for savings.
The budget deficit for 2017 is SEK 11 billion larger than in the previous
forecast. This is mainly due to lower tax income because of larger outgoing
payments of local government tax and an expected outflow of savings from tax
accounts. Also, government grants to local authorities are higher, while
migration expenditure is somewhat lower than previously estimated.
In total for both years, the forecast for the net borrowing requirement is
reduced by SEK 27 billion.
+------------------------------------------------------------------------------+
|Net borrowing requirement and central government debt (SEK billion) |
+-------------------------------------------------------+-----+--------+-------+
|Previous forecast in parentheses | 2015| 2016| 2017|
+-------------------------------------------------------+-----+--------+-------+
|Net borrowing requirement (budget balance with opposite| | | |
|sign) | 33|-41 (-3)|42 (31)|
+-------------------------------------------------------+-----+--------+-------+
|Central government debt |1 403| 1 376| 1 411|
+-------------------------------------------------------+-----+--------+-------+
|Central government debt as % of GDP | 34| 32| 32|
+-------------------------------------------------------+-----+--------+-------+
Central government debt is estimated at SEK 1,376 billion at the end of 2016 and
SEK 1,411 billion at the end of 2017, which corresponds to 32 per cent of GDP
for both years.
Lower issue volume of government bonds
To meet the reduced net borrowing requirement and a lower refinancing
requirement, the Debt Office cuts borrowing in government bonds by SEK 5.5
billion this year and SEK 11 billion next year. The auction volume decreases
from SEK 4 billion to SEK 3.5 billion.
The issue volume in inflation-linked bonds remains at SEK 18 billion a year.
Borrowing in T-bills is also unchanged.
+------------------------------------------------------------------------+
| Borrowing (SEK billion) |
+-----------------------------------------+------+-----------+-----------+
| Previous forecast in parentheses | 2015 | 2016 | 2017 |
+-----------------------------------------+------+-----------+-----------+
| Government bonds | 86 | 83 (88) | 77 (88) |
+-----------------------------------------+------+-----------+-----------+
| Inflation-linked bonds | 17 | 18 (18) | 18 (18) |
+-----------------------------------------+------+-----------+-----------+
| T-bills | 141 | 120 (120) | 130 (130) |
+-----------------------------------------+------+-----------+-----------+
| Foreign-currency bonds | 91 | 59 (60) | 66 (67) |
+-----------------------------------------+------+-----------+-----------+
| - of which on-lending to the Riksbank | 53 | 59 (60) | 66 (67) |
+-----------------------------------------+------+-----------+-----------+
In the report Central Government Borrowing - Forecast and Analysis 2016:2 there
is also a box titled "What is a reasonable size of the central government
debt?". The box is based on the Debt Office's new Focus Report which discusses
the role of the government debt in the economy from both a theoretical and an
empirical perspective (currently available only in Swedish).
Contact
Linda Rudberg, press officer, +46 (0)8 613 45 38
Central Government Borrowing - Forecast and Analysis 2016:2:
http://hugin.info/133745/R/2020684/750561.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Riksgälden via GlobeNewswire
[HUG#2020684]
Unternehmensinformation / Kurzprofil:
Datum: 15.06.2016 - 09:30 Uhr
Sprache: Deutsch
News-ID 477774
Anzahl Zeichen: 6807
contact information:
Town:
Stockholm
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 216 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Larger budget surplus this year turns into deficit in 2017"
steht unter der journalistisch-redaktionellen Verantwortung von
Riksgälden (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
