How does the government borrow?

One of the main tasks of the Swedish National Debt Office is to manage central government debt. We do this at as low cost as possible in the long term and without taking too great risks.

The Swedish National Debt Office borrows money on behalf of the Swedish government by selling government securities, primarily bonds, by auction. Those who buy bonds lend money to the government. The bonds can then be sold on a secondary market. When a bond matures, the Swedish National Debt Office pays back the money to the owner of the bond. Then we borrow again by selling new bonds.

How the management of government debt is decided

It is the government that decides on guidelines for government debt management, but the Swedish National Debt Office is active in producing data and proposals.

  1. The Swedish National Debt Office makes proposals for guidelines to the government.
  2. The government decides on the guidelines.
  3. The guidelines begin to take effect.
  4. We report to the government in the annual report.
  5. The government evaluates the activities and reports to the Riksdag.
  6. The Riksdag evaluates the administration of central government debt.
  7. We consider the opinions of the Riksdag in our draft guidelines for the next year.

The Swedish National Debt Office makes forecasts for the government's borrowing needs

The purpose of the forecasts is to be able to plan the financing of central government debt. To put it simply, this is a forecast of how much the government debt will change, that is to say how much extra we must borrow or how much we will pay back on our loans over a certain period.

The Swedish National Debt Office is the internal bank of the state, where large sums are paid out and received every day. It may end in a surplus or a deficit. We borrow to cover a deficit. We invest a surplus by, for example, paying back on loans. Based on our annual forecast, we also produce forecasts every month. We also make forecasts every day. Three times a year, we publish the report Central Government Borrowing – Forecast and Analysis.

Reports: Central Government Borrowing – Forecast and Analysis

How much do we borrow?

How much the Swedish National Debt Office borrows depends above all on how the national budget develops. When there is a deficit in the national budget, we borrow money and then the government debt increases. If there is a surplus in the budget, we amortise, that is pay back, some of the loans and the government debt decreases.

But whether we have a surplus or deficit in the national budget, we need to borrow to replace borrowing that falls due.

How the budget balance develops from year to year is largely due to economic growth in Sweden. Growth mainly affects how much tax the government receives, but it also affects the size of the payments the government makes, for example for compensation to the unemployed, sickness and parental allowances and student funding. Macroeconomic developments also affect the government's budget balance, through companies and individuals choosing to place capital in their tax accounts. In a low interest rate environment, companies face negative interest rates, making the tax account an attractive alternative.

Who do we borrow from?

The Swedish National Debt Office sells bonds through retailers (various banks) that bid in our auctions in the form of interest. The one offering the lowest interest rate is awarded first.

Buyers can be Swedish and international pension funds, insurance companies, banks, funds and central banks. But we have no information about who ultimately buys the bonds because they are traded on a secondary market. The bonds often change owners a number of times before maturity.

Which government securities do we sell?

The Swedish National Debt Office not only sells government bonds but also treasury bills, inflation-indexed bonds and bonds in foreign currency. The borrowing requirement and the guidelines decided by the government determine how we divide borrowing between different types of government securities.

The guidelines govern, among other things, the maturity of the government debt, i.e. how long the loans shall be restricted on average. They also govern its composition – how much shall be nominal debt in kronor, inflation-indexed debt in kronor and debt in foreign currency. On this basis, we can calculate an appropriate plan for the financing of central government debt.


A government bond is a promissory note that says that the holder has lent a certain amount of money to the government for a certain period of time, as well as how much money the holder gets back from the government when that time has passed.

An inflation-indexed bond is roughly the same thing, a promissory note in which the interest rate is fixed plus compensation for inflation.

Treasury bills are short-term promissory notes used by the Swedish National Debt Office to manage variations in the loan requirement.

Gross domestic product describes the size of a country's economy by adding up the value of all goods and services produced in a country.