Budget deficit 2009 in line with forecast

12 January 2010 - Press release

The Swedish central government budget showed a large deficit in 2009[1]. The main part of the deficit, SEK 95 billion[2], constitutes of loans to the Riksbank in order to strengthen the currency reserve. The remaining of the deficit of SEK 81 billion, 2.6 per cent of GDP, is explained by the deep recession which affected central government finances mainly through lower tax income. In total, the budget deficit amounted to SEK 176 billion.

Excluding the on-lending to the Riksbank the budget deficit was SEK 81 billion. This can be compared with a budget surplus, excluding the sales of government owned enterprises as for example Vin & Sprit, of SEK 58 billion in 2008. This change indicates the effects of the economic downturn on the central government budget.

The Debt Office's latest forecast was a deficit of SEK 179 billion. The difference is chiefly explained by the fact that a majority of the planned on-lending to Iceland will take place in 2010 instead of in 2009.

Interest payments on central government debt totaled SEK 31 billion, which is SEK 2 billion lower than in 2008.

Central government debt was SEK 1,189 billion at the end of 2009. That corresponds to 38.5 per cent of GDP. Excluding the on-lending to the Riksbank the debt was 35.5 per cent of GDP. The Debt Office's latest debt forecast was SEK 1,185 billion.

The central government debt increased by SEK 70 billion compared with 2008. The fact that the increase in the debt was smaller than the budget deficit is due to the fact that the Debt Office's short-term investments decreased by SEK 62 billion. At the same time, the re-evaluation of the foreign currency debt, inter alia because of changes in exchange rates, caused the debt to decrease by SEK 31 billion.

Large deficit in December
Central government payments showed a deficit of SEK 117.5 billion in December. The deficit was thus SEK 14.2 billion smaller than the Debt Office's latest forecast. The difference is mainly explained by displacements of payments between months within the Debt Office's net lending.

The Debt Office's net lending was SEK 18.2 billion lower than calculated. This is explained by the fact that repo transactions* made by government agencies were SEK 11.9 billion lower than expected. In addition, only a small part of the expected on-lending to Iceland was carried through in December. The remaining on-lending is expected to take place in 2010.

Tax payments were SEK 1.4 billion higher than calculated.

Disbursements from authorities were SEK 4.8 billion higher than forecast, which is mostly explained by higher disbursements from the Swedish International Development Cooperation Agency and the Swedish Board of Agriculture as well as to the European Union.

Interest payments on central government debt were SEK 9.2 billion, which was SEK 0.6 billion higher than calculated.

The outcome for January will be published at 9.30 am on 5 February 2010.

Further information can be obtained from:
Sofia Olsson, +46 8 613 47 30

 

* Repo transactions by government agencies mean that they sell government securities with a repurchase agreement. The payment of the repos must be deposited in an account at the Debt Office. If the total volume of outstanding repos change during the month compared to the previous turn of the month it will affect the outcome of the borrowing requirement. We make forecasts of the repo transactions on the basis of the information we receive from the government agencies. However, the forecast are very uncertain since the government agencies may alter their plans on a short notice.

[1] The outcome is preliminary and may be revised in connection with the Debt Office's annual accounts. Please refer to the Debt Office's annual report for 2009 for the definitive annual outcome. The information about the budget deficit in per cent of GDP is a forecast that will be revised once the GDP outcome is published by Statistics Sweden.

[2] The on-lending to the Riksbank has previously been accounted to approximately SEK 97 billion. This corresponds to SEK 95 billion according to the current exchange rate.