Swedish government borrowing cut on lower 2017 deficit

Press release 22 February 2017

Sweden’s economy remains strong, leading to a better development of central government finances than previously projected by the Debt Office. The budget deficit for 2017 is now estimated at SEK 20 billion, which is about SEK 12 billion lower than the previous forecast. On account of the lower deficit the Debt Office cuts bond borrowing.

– The Swedish economy will continue to grow at a good pace, boosting tax income and reducing the government borrowing requirement, says Hans Lindblad, Director General of the Swedish National Debt Office.

The Debt Office expects GDP growth of 2.3 per cent in 2017 and 1.9 per cent in 2018. Growth is mainly driven by domestic demand, as international demand is slower than normal.

The development of Sweden’s central government finances is still affected by excess deposits in tax accounts. The Debt Office estimates these deposits at about SEK 50 billion, unchanged from the previous forecast. This means that the borrowing requirement and government debt are lower than they would be without the excess deposits.

Changes compared with the previous forecast

The budget balance for 2017 is about SEK 12 billion higher than the previous forecast, mainly due to increased income from capital gains taxes. For 2018, the budget balance forecast is reduced by SEK 4 billion due to higher expenditure for areas such as schools, the police and development assistance.

Net borrowing requirement and central government debt (SEK billion)
Previous forecast in parentheses




Net borrowing requirement (budget balance with opposite sign)


20 (33)

–17 (–20)

Central government debt


1,352 (1,372)

1,324 (1,342)

Central government debt as % of GDP




Central government debt is estimated at SEK 1,352 billion at the end of 2017 and SEK 1,324 billion at the end of 2018, which corresponds to 30 and 28 per cent of GDP respectively.

Lower issue volume of government bonds

The lower net borrowing requirement leads to reduced borrowing in government bonds. The issue volume is cut from SEK 3 billion to SEK 2.5 billion per auction and there will be somewhat fewer auctions. Borrowing in inflation-linked bonds also decreases somewhat as one auction per year is removed. The issue volume in T-bills is kept at an average SEK 10 billion per auction.

Borrowing (SEK billion)
Previous forecast in parentheses




Government bonds


52 (66)

50 (66)

Inflation-linked bonds


13 (14)

13 (14)



110 (110)

80 (80)

Foreign-currency bonds


68 (67)

105 (105)

– of which on-lending to the Riksbank


68 (67)

105 (105)

Central government borrowing – forecast and analysis 2017:1

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Robert Sennerdal, Press Secretary, +46 (0)8 613 46 94