Spring budget boost for Swedish healthcare, defence and justice

The Swedish government needs to start shifting to a more expansive fiscal policy to boost growth now that inflation has begun to subside, it said in its spring budget on Monday. Recent budgets have prioritised the need to fight inflation, which peaked at more than 10% at the end of 2022.

The Swedish government needs to start shifting to a more expansive fiscal policy to boost growth now that inflation has begun to subside, it said in its spring budget on Monday.

Recent budgets have prioritized the need to fight inflation, which peaked at more than 10% at the end of 2022. But with inflation now close to target, unemployment rising and many households struggling with higher mortgage payments, it was time to switch focus to supporting growth, the government said. "We are setting our sights on taking Sweden through the economic slowdown so that the economic winter can become spring," Swedish Finance Minister Elisabeth Svantesson said in a summary of the budget published late on Sunday in the daily newspaper Svenska Dagbladet.

The government said the budget includes 17.3 billion Swedish crowns ($1.59 billion) of new spending, slightly more than it had flagged at the end of last month. The economy shrank 0.2% last year, but the government expects growth of 0.7% this year.

Many of the measures, such as an additional 6 billion crowns for health and welfare services and more money for defence and the judicial system, had already been announced. Over the longer term, health and welfare services and the transition to a fossil-fuel free economy will require heavy investment, the government acknowledges, while the right-of-center ruling coalition has also promised income tax cuts.

Unlike many European states, Sweden's public finances are in strong shape and the government has some room for manoeuvre. State debt is expected to be about 33% of GDP this year against a eurozone average of around 89%.

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