Deficit for Swedish central government in March 2020

Press release 7 April 2020

Swedish central government payments resulted in a deficit of SEK 42.1 billion in March. The Debt Office's forecast was a deficit of SEK 12.0 billion. The deviation is mainly due to the fact that foreign currency loans to the Riksbank were refinanced earlier than expected and loans to Swedish Export Credit Corporation. Tax income was in line with forecast.

Correction 8 April: The expansion of the Swedish Export Credit Corporation’s credit framework is announced, but the necessary decisions have not yet been made. At present, their credit framework with the Debt Office is SEK 125 billion.

The primary balance was 4.6 billion lower than expected. Tax income was SEK 0.3 billion lower than forecasted. At the same time, payments to local governments were SEK 2.5 billion higher as a result of extra support to strengthen welfare, which was decided by the Riksdag on 19 February following a committee initiative. In addition, the payments were higher from, among others, the Legal, Financial and Administrative Services Agency and the universities.

The economic downturn due to the outbreak of covid-19 is expected to have a clearer impact on the central government's budget balance as of April.

The Debt Office’s net lending to government agencies etc. were SEK 27.3 billion higher than calculated, this was due to temporarily higher lending to the Riksbank and lending to Swedish Export Credit Corporation. Loans in foreign currency to the Riksbank equivalent to SEK 20.5 billion maturing in April were refinanced already in March. When the original loan matures in April, lending to the Riksbank will decrease by the same amount. Swedish Export Credit Corporation borrowed SEK 10.0 billion, within its borrowing limit of SEK 125 billion.

Interest payments on central government debt were SEK 1.8 billion lower than forecast. This was due to lower capital losses in switch auctions of bonds in SEK than estimated.

For the twelve-month period up to the end of March 2020, central government payments resulted in a surplus of SEK 64.0 billion.

Central government debt amounted to SEK 1,118 billion at the end of March.

The outcome for April 2020 will be published on 8 May at 9.30 a.m.

The virus outbreak will lead to large deficits during the forecast period, 2020-2021

The outbreak of covid-19 will have serious consequences for economic development both in Sweden and the rest of the world. A number of different economic measures have been taken to mitigate the effects. Processing times and the extent to which decided economic measures will be used make it uncertain how quickly and how much the central government budget balance will be affected. The measures are expected to have impact on the central government budget balance as of April. In addition, income for companies and employees will be lower than previous forecasted as a result of the economic downturn. Expenditure is also expected to increase in addition to the economic measures presented.

In the short term, a lower budget balance will primarily be managed within the liquidity management, as the Swedish National Debt Office communicated on March 16. This is in line with the Debt Office’s usual strategy of first increasing the short-term borrowing and then gradually adjusting the long-term borrowing as needed. This means that the previously communicated plan for bond borrowing applies until further notice.

The Debt Office intends to return on 19 May with an overall assessment of the economic development, forecasts of the central government budget balance and borrowing in the report “Central Government Borrowing – Forecast and Analysis 2020:2”.

Contact

Press Secretary, +46 (0)8 613 47 01

Budget balance and central government net borrowing requirement1 (SEK million)
 Outcome   Mar.Forecast Mar.Deviation Mar.Acc.    Dev2Outcome 12-month
Budget balance -42 074 -12 005 -30 069 -16 724 63 960
Net borrowing requirement1  42 074 12 005 30 069 16 724 -63 960
Primary balance3 12 533 7 890 4 643 -9 241 -53 103
Net lending to agencies etc.4 25 553 -1 712 27 265 27 943 -35 288
Interest payments on central government debt 3 988 5 827 -1 839 -1 978 24 431
- Interest on loans in SEK 1 240 3 865 -2 625 -2 566 15 898
- Interest on loans in foreign currency -191 -130 -61 -146 -483
- Realised currency gains and losses 2 939 2 092 847 734 9 016
1 The net borrowing requirement corresponds to the budget balance with opposite sign.
2 Sum of monthly forecast deviations since last forecast (February 2020).
3 Net of the state's primary expenditure and income.
4 The net of government agencies etc. deposits and loans in the state’s internal bank. The net lending includes both current government   operations and temporary occurrences which can be decided on short notice. The net lending affects the net borrowing requirement and central government debt, but are not covered by the Central government expenditure ceiling.

More data on the borrowing requirement and government debt.

Report: Sweden's central government debt March 2020

The monthly outcome of the central government net borrowing requirement is included in the official statistics of Sweden.