The Swedish government has unveiled its 2026 autumn budget, prioritizing families and businesses to combat the ongoing economic downturn. Key measures include tax cuts for households and companies, with a focus on boosting employment and economic growth. Despite missing climate targets, the budget aims to strengthen the economy while maintaining Sweden's leadership in climate policy.
Sweden's 2026 Autumn Budget: Families and Businesses Take Center Stage
Sweden's 2026 Autumn Budget: Families and Businesses Take Center Stage
The Swedish government's 2026 budget has been unveiled, with a strong focus on supporting families and businesses.
On Monday morning, the budget for 2026 was released.
According to the finance minister, priorities have been clearly set for families where adults are employed.
– This is a budget for Swedish households in many ways. But the focus is on families where both adults are working. It's their turn now. They need to strengthen their purchasing power, says Elisabeth Svantesson.
More than half of the initiatives involve tax cuts and strengthening household economies. The aim, according to the finance minister, is to break the economic downturn.
– We must ensure not to collect more taxes than necessary. If we forget the hard-working people, growth will not return. Both families and businesses are the key here, says Svantesson as she presented the 9.8-kilogram, 3,300-page document.
One of the initiatives Svantesson highlights for families with children is reduced preschool fees.
Major Focus on Tax Cuts
The budget is based on an agreement between the government and the Sweden Democrats and includes investments totaling nearly 80 billion SEK.
A significant portion of the funds is allocated to various tax cuts. Among the proposals are: Halved food VAT, reduced income tax, lower taxes for pensioners and those with sickness and activity compensation, and reduced electricity tax.
Investments in Businesses
The investments in businesses highlighted during the press conference include: Lower costs for hiring young people, major investments in AI and data, reduced taxes for small businesses, less regulatory hassle, and better service.
Businesses are prioritized to help the country out of the recession, according to the government.
– The problem with this recession is that it is prolonged, says Svantesson, particularly noting that unemployment risks becoming entrenched. We still see unemployment at too high levels.
Missing Climate Targets
Sweden has an emissions gap against all climate goals and EU commitments in the 2025 scenario, as stated in the autumn budget. Sweden misses the emissions target by 4.3 million tons of CO2 equivalents relative to its 2030 commitment.
– I am not ashamed of Swedish climate policy, we are a leading country, says Finance Minister Elisabeth Svantesson (M).
Are the goals unrealistic?
– No, they are not generally set too high, but it is obviously difficult now, and all European countries are struggling with this, says Svantesson.
“Uptake has decreased in recent years, and future scenarios show continued decline until 2045, while forecasts are very uncertain. Climate change, pests, and increased logging due to, among other things, higher demand for timber in Europe contribute to the difficulties in meeting the LULUCF commitment,” writes the government in the budget.
No Interest Rate Cuts
During the autumn, the government expects the Riksbank to cut the interest rate by an additional 0.25 percentage points, according to the budget proposal. This would bring it to 1.75 percent.
This is despite inflation being expected to rise slightly in the near term. The reason is that demand remains weak and unemployment high. No further interest rate cuts are expected in 2025 or 2026.
In addition to the 80 billion SEK investments, the government allocates approximately 50 billion SEK, outside the so-called reform space, to defense and support for Ukraine.
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