Sweden unveils $8.5 billion budget to boost growth ahead of elections
Sweden’s right-wing coalition announced an ambitious 2026 budget on Monday, promising an $8.5 billion (80 billion kronor) spending boost to accelerate economic growth ahead of next year’s general election.
Finance Minister Elisabeth Svantesson emphasized the country’s strong fiscal position, saying, “We have world-class government finances; we have low government debt, and while others are struggling with high debt costs, we are not. We have a strong position, and we can use our strength,” News.Az reports, citing Reuters.
The spending plan, the most expansive since the COVID-19 pandemic, includes tax cuts for workers, pensioners, and companies, lower VAT on food, and increased funding for defence, schools, healthcare, and civil defence. The budget also raises housing allowances for low-income families.
Unlike countries such as France and Britain, which are constrained by rising debt and high spending pressures, Sweden enjoys relatively low government debt at around 32% of GDP. Even after committing to spend 3.5% of GDP on defence and borrowing to fund new nuclear power plants, debt is expected to remain below 35% of GDP.
This financial leeway gives Sweden room for fiscal stimulus, potentially easing pressure on the Riksbank to cut interest rates. Inflation remains above target, but the central bank left open the possibility of a rate cut before year-end. Its next policy decision is set for September 23.
Sweden’s economy, like many across the EU, has faced sluggish growth due to uncertainty around global trade conflicts and lingering effects of inflation that peaked above 10%. The new budget aims to revive growth while maintaining the country’s strong financial standing.
Similar news
