Historical development

Central government debt history


The Debt Office was formed in order to manage the central government debt. During the 18th Century Sweden’s central government debt grew and inflation was high. Sweden borrowed money, among other things, in order to finance the war against Russia.


The central government debt was record high after Sweden lost “the Finnish war” against Russia.


Sweden had substantial foreign loans that we were unable to pay off. The Government therefore wrote off the major portion of the foreign debt. King Charles XIV paid the rest, and the Swedish province of Pomerania in northern Germany was pledged against payment in silver.


In spite of tough times, the central government debt was mostly paid off and the Debt Office instead had foreign claims.


Sweden had a relatively high foreign currency debt due to investments in infrastructure: railways, hydroelectric power and the telephone system.


The oil price rose dramatically in 1973 and 1979. This led to an international recession which destabilised the Swedish economy. Sweden borrowed abroad in order to finance the deficit in the central government budget and interest rates rose sharply.


Central government finances were poor and the central government debt doubled from SEK 600 billion to SEK 1,300 billion (or from 44 to 78 per cent as a proportion of GDP).


The economy picked up and the government deficit decreased. Over a five-year period around the turn of the millennium the central government budget had a surplus, largely due to substantial tax revenues from the rise of the stock market.


The cental government budget again showed a surplus, after a couple of years of relatively large deficits.

Debt development

Historical data-diagrams