The Swedish government, led by Finance Minister Elisabeth Svantesson, announces an expansive budget with an 80 billion SEK reform space aimed at boosting household finances and economic growth. Despite facing criticism from opposition parties, the budget is praised by business leaders and youth organizations for its potential to stimulate the economy.
Swedish Government Unveils Ambitious 80 Billion Budget Plan
Swedish Government Unveils Ambitious 80 Billion Budget Plan
The Swedish government is allocating 80 billion SEK in reform space in the new budget, as announced by Finance Minister Elisabeth Svantesson (M) at a press conference.
– Families will have more money in their pockets, said the finance minister during the briefing.
On Thursday, Finance Minister Elisabeth Svantesson traditionally met with the media outside the Prime Minister's summer residence, Harpsund, to provide her perspective on the economic situation and outline the conditions for the upcoming budget.
During the press conference, the finance minister described the economy as strained, largely due to global uncertainties.
– We are still in a recession, and many are struggling with the effects of the high inflation that Sweden has faced, said the finance minister.
However, the finance minister noted signs of a recovery in purchasing power and a potential economic rebound. Inflation is decreasing, and Swedish industry is performing well, according to the finance minister.
– Overall, the economy is moving in the right direction, she stated.
Investing 80 Billion
The finance minister had previously promised an expansive budget to benefit households and generate growth. Among the expected measures: tax cuts on income and energy.
At the press conference, she announced that the government is investing 80 billion SEK in reform space in the new budget.
– We are focusing primarily on families to instill hope for the future. 80 billion in reform space. It is a well-balanced budget given our current situation. The recession we are in must be broken, said the finance minister.
Reform space refers to the unfunded measures in the budget; the area where the government believes reforms can be implemented.
The National Institute of Economic Research has assessed the reform space at 34 billion SEK, while the Confederation of Swedish Enterprise demanded it be 65 billion SEK. Last year, 60 billion SEK was invested in new initiatives.
Experts have predicted significant investments in this budget.
– There will be a lot of tax cuts directed at households, and possibly towards businesses, said Elisabeth Svantesson.
S: “Lost Control”
Mikael Damberg, the Social Democrats' economic policy spokesperson, is unimpressed by the investment.
– Svantesson seems to have lost control over the Swedish economy. We have had three years now where Sweden has underperformed. We have among the lowest growth rates in the entire EU and 100,000 more unemployed. It is proof that the government's economic policy has not worked, said Mikael Damberg.
He believes the government is investing in the wrong areas.
– My problem is that they only talk about this figure. The government has previously presented very large budgets. The problem has been that previous budgets were misdirected. There have been tax cuts only for those earning over 65,000 SEK a month. Instead of raising child benefits for ordinary families, for example, he said.
He also wants answers on how the investments will be financed.
– The finance minister still cannot today explain what will happen to public finances with this announcement. Are new deficits expected? Will they borrow for this? A finance minister should not obscure this during a press conference, said Mikael Damberg.
Praised by Muf
The budget is praised by the Moderate Youth League (Muf).
“Never before have we had a government that invests so heavily in Sweden!” wrote the league's chairman Douglas Thor on X.
The chief economist of the Confederation of Swedish Enterprise, Sven-Olov Daunfeldt, is also positive but emphasizes the importance of how the money is used.
“If we are to boost growth, we need reforms that strengthen the incentives to work, invest, and hire. This would strengthen both companies and households,” he wrote in a comment.
Saco's chief economist Håkan Regnér also welcomes the 80 billion.
“We have had several consecutive crises that have hit households hard. Combined with the uncertain global situation, households are cautious. Therefore, it is important with investments that are noticeable in household finances and that truly address the neglected needs in infrastructure and education,” he wrote in a comment.
LO's chief economist Torbjörn Hållö agrees with the praise.
“Now it is important to make wise reforms that create growth and jobs. Raise child benefits and increase household purchasing power,” he wrote on X.
V: “Not a Coincidence”
The Left Party's economic policy spokesperson Ida Gabrielsson argues that the finance minister is responsible for the recession and that the investment is an election strategy.
“That 80 billion in reform space 'emerges' when it is time for an election budget is no coincidence,” she wrote on X.
“One can only hope that the reform space of a full 80 billion does not, as before, only go to the top tier,” she continued.
The Center Party is also critical, calling the investment “a desperate attempt to spend its way out of voter dissatisfaction with borrowed money at the last minute.”
“The government takes a gigantic reform space but lacks a real strategy to reduce unemployment, increase growth, and reduce emissions. Svantesson talks about hope for the future but lacks future proposals, and I believe voters will see through it,” wrote Martin Ådahl, economic policy spokesperson.
Disagreement on Food VAT
Expressen has previously reported on tough negotiations between the Tidö parties regarding how best to support households. The Sweden Democrats demand a reduction in food VAT, which they argue benefits all households, not just those with children. The Liberals and Christian Democrats, on the other hand, have proposed raising child benefits.
Within the Moderates, there is generally skepticism towards increased benefits. Lowering the food VAT would cost many billions, and critics argue it is an uncertain reform. According to sources to Expressen, an SD proposal has been significantly revised.
During the press conference, the finance minister did not want to answer whether there will be a reduction in food VAT.
– We will return to that question, she said.
The entire autumn budget will be presented on September 22.