Swedish government borrowing largely unchanged despite higher expenditure

28 October 2015 - Press release

Sweden’s central government budget will show a deficit of SEK 45 billion in 2015, SEK 33 billion in 2016 and SEK 47 billion in 2017, according to the Debt Office’s new forecast. Tax income continues to increase while expenditure, particularly for migration, rises. Overall, this means that borrowing is largely unchanged from the previous forecast.

The budget deficit – the net borrowing requirement – for 2015 is SEK 25 billion lower than in the previous forecast from June, mainly because of higher tax income. Next year, migration expenditure increases sharply, while tax income keeps rising faster than previously estimated. Overall, the budget deficit increases by SEK 8 billion compared with the June forecast.

– The Swedish economy and the underlying development of central government finances show an unexpected strength. The increase in migration expenditure is offset by higher tax income, but it is important to point out that there is great uncertainty, says Hans Lindblad, Director General of the Swedish National Debt Office.

The Debt Office estimates Swedish GDP growth of 3.1 per cent in 2015 and 2.8 per cent in 2016, which is 0.5 and 0.3 percentage points higher than in the previous forecast. In 2017, the economy is expected to grow 2.4 per cent.

Higher expenditure for migration

The Migration Agency's disbursements are projected to be SEK 26 billion in 2015, SEK 58 billion in 2016 and SEK 70 billion in 2017. This is an increase by SEK 1 billion for 2015 and SEK 31 billion for 2016 compared with the previous forecast. Part of the increase in migration expenditure is compensated by an expected decrease in development assistance.

Net borrowing requirement and central government debt (SEK billion)

                     

2015

2016

2017

Net borrowing requirement

45

33

47

Central government debt

1 442

1 469

1 511

Central government debt, % of GDP

35 %

35 %

35 %

Central government debt incl. on-lending and money market assets, % of GDP

28 %

28 %

29 %

Issue volumes unchanged

The planned issue volume of government bonds remains at SEK 4 billion per auction throughout the forecast period. This means that borrowing in government bonds will be a total SEK 86 billion in 2015 and SEK 88 billion in 2016 and 2017. The issue volume in inflation-linked bonds is also unchanged.

Borrowing in T-bills is virtually unchanged. The Debt Office still expects to issue an average of SEK 17.5 billion per auction. The stock will grow to SEK 135 billion by the end of 2016.

Borrowing (SEK billion)

                     

2015

2016

2017

Government bonds

86

88

88

Inflation-linked bonds

17

18

18

T-bills

119

135

135

Foreign currency bonds

91

92

75

–      of which on-lending to the Riksbank

53

70

55

 Central government borrowing – forecast and analysis 2015:3, pdf 

Contact

Thomas Olofsson, Head of Debt Management, +46 (0)8 613 47 82
Linda Rudberg, Press Officer, +46 (0)8 613 45 38