Lower government budget surplus increases borrowing requirement

Press release 27 lokakuuta 2022

A rapid slowdown in the economy leads to weaker central government finances next year, according to the Debt Office’s new forecast. Temporary factors related to the high price of electricity also weigh on the budget balance. This creates an increased borrowing requirement for the central government, which the Debt Office is financing with short-term borrowing.

Since the May forecast, we have seen inflation continue to rise and interest rates increase, while the economy is slowing down. This is a situation in which future developments are largely affected by uncertain international factors, as well as by the monetary and fiscal policy response. We foresee an increased borrowing requirement ahead, which we are financing with short-term borrowing,” says Debt Office Director General Karolina Ekholm. 

Rapid slowdown in Sweden and the world

The Swedish economy is slowing while inflation is the highest in several decades and interest rates have risen. The Debt Office expects the economy to shrink next year and unemployment to increase. Altogether, the expected macroeconomic development has an adverse effect on the central government budget balance.

Central government budget surplus decreases

The budget balance is also adversely affected by expected disbursements of electricity price compensation in some form. The Debt Office’s new forecast points to a smaller surplus this year and next year than in the previous forecast. For the new forecast year 2024, the Debt Office’s assessment is that the surplus will shrink further. There is a great deal of uncertainty associated with the budget forecast. This is particularly the case in regard to the outflows from tax accounts and other temporary incoming and outgoing payments pertaining to the high electricity price, such as congestion-rent revenue and electricity price compensation.

Forecast for Swedish economy and central government finances
Previous forecast (May ‘22) in parentheses202220232024

GDP growth (annual rate in %)

2.4 (2.2)   

-1.0 (1.8)


Unemployment (% of labour force)

7.4 (7.5)

7.9 (7.2)


CPIF inflation (annual rate in %)

7.8 (5.5)

5.4 (2.8)


Budget balance (SEK billion)

91 (102)   

27 (75)


Central government debt (SEK billion)

1,132 (1,103)

1,117 (1,026)


Central government debt (% of GDP)

19 (19)

18 (17)


Public sector debt (% of GDP)

33 (33)

31 (30)


Increased short-term borrowing

The Debt Office is meeting the larger borrowing requirement through treasury bills and other short-term borrowing. The issuance of nominal and inflation-linked bonds remains at the current volumes, while the planned issuance of a foreign currency bond has been rescheduled from 2022 to 2023.

Central government borrowing, SEK billion
Previous forecast (May ´22) in parentheses 202220232024
Nominal government bonds 46 (46) 40 (40) 40
Inflation-linked bonds 9 (9) 9 (9) 9
Green bonds 0 (0) 0 (0)   0
Treasury bills (stock at year-end) 83 (83) 158 (103) 140
Foreign currency bonds  0 (20) 22 (0) 0

Central government debt continues to decrease

At the end of 2021, the central government debt amounted to SEK 1,204 billion, corresponding to 22 per cent of GDP. The debt is expected to decrease to SEK 1,109 billion in 2024, meaning that it will end up at 18 per cent of GDP at the end of the forecast period.

The debt for the entire public sector, called the Maastricht debt, is expected to decrease from 36 per cent of GDP at the end of 2021 to 33 per cent in 2022 and 31 per cent in 2023 and 2024. This is also the measure referred to for the debt anchor of 35 per cent of GDP (±5 percentage points) in the fiscal policy framework.

Report: Central Government Borrowing – Forecast and Analysis 2022:3

The report is presented at a virtual press conference today, 27 October, at 10:00 a.m.

Follow the live stream of the press conference here (in Swedish)

Journalists can e-mail questions to press@riksgalden.se to be answered during the press conference. For further information or interview requests, contact the Debt Office's press function: +46 (0) 8 613 47 01, press@riksgalden.se.

The preliminary publishing date for Central Government Borrowing – Forecast and Analysis 2023:1 is 23 februari 2023.


Mats Lilja

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