The Swedish economy will gradually return to normal after years of financial and debt crisis, according to the Ministry of Finance's February forecast. The deficits will slowly return to balance and surplus. In 2018, net lending is estimated to reach over 1 per cent of GDP.
However, this depends on reforms being fully financed. To create scope for initiatives, the Government intends to propose financing measures in the Spring Fiscal Policy Bill worth up to SEK 9 billion per year between 2015 and 2018.
"It is now important to strengthen the buffers and again build up a surplus in public finances. A small open economy with a large financial sector should safeguard strong public finances to protect jobs and welfare when there is turbulence in the world around us", says Minister for Finance Anders Borg.
Swedish exports will remain hampered by weak international demand and growth in 2014 will be driven by domestic demand, bolstered by an expansionary fiscal policy. In the years ahead, the global recovery is expected to become more stable and Swedish growth to gradually gain strength. GDP is expected to grow by 3.5 per cent in 2015 and 3.7 per cent in 2016. Employment is expected to continue to increase by between 0.9 and 1.2 per cent annually during the forecast period, and unemployment will gradually decline from 7.7 per cent in 2014 to 5.9 per cent in 2018.
As the economy returns to normal and the effects of the recession abate, fiscal policy will enter a new phase in which general government net lending will return to balance and surplus.
Full press release
© Government Offices of Sweden - Regeringskansliet
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