Budget surplus becomes deficit in 2024

Press release 26 lokakuuta 2023

Sweden’s central government budget balance has continued to develop more strongly than expected and is now approaching a surplus for this year too. But then two years of deficits will follow, according to the Swedish National Debt Office’s new forecast. The Debt Office is therefore proceeding with the planned increase in bond issuance at the turn of the year.

Today, the Debt Office is presenting this year’s third and final borrowing report.

“Central government finances have long been stronger than expected, and 2023 is yet another year of a surplus. We nevertheless expect increased spending ahead to weigh on the budget balance, which will be negative in both 2024 and 2025. This will cause the government debt to grow over the coming two years, although it remains low from both a historical and international perspective,” says Debt Office Director General Karolina Ekholm.

The Debt Office has responded to the budget balance’s continued strong development since the May forecast by lowering the volume of treasury bills and other short-term borrowing. In addition, this year’s planned foreign currency bond issue is being postponed until next year. The Debt Office will nevertheless proceed as planned in increasing the auction volume of nominal government bonds from SEK 2.5 billion to SEK 3 billion, to meet the growing deficit as well as redemptions.

Higher expenditure for central government

The shift next year from a budget surplus to a deficit is the result of a distinct increase in spending, due to factors such as initiatives in the Budget Bill and the high inflation. At the same time, income from taxes remains weak, partly as a result of the economic downturn. For 2025, the deficit is slightly larger than for 2024. Although tax income grows at a fairly good pace then, this does not fully compensate for the rising expenditure.

Central government debt remains low

The development of the budget balance – which with the opposite sign becomes the net borrowing requirement – affects the size of the central government debt. The Debt Office’s new forecast entails an increase of just over SEK 100 billion in the coming two years, although the debt remains essentially unchanged as a percentage of GDP. The debt of the public sector as a whole stays in the lower part of the range for the fiscal policy framework’s debt anchor, which is 35 per cent ± 5 percentage points.

Capital contribution to Riksbank not included

The Debt Office’s forecast does not contain a capital contribution to the Riksbank, as we did not have sufficient information regarding the amount or timing upon completing this forecast. Such a capital contribution would decrease the central government budget balance and increase the debt by the corresponding amount.

Debt Office’s forecast – key figures

Table 1 Central government borrowing – key figures
SEK billion202320242025
Nominal government bonds 45 (45) 60 (60) 60 (–)
Inflation-linked bonds 9 (9) 9 (9) 9 (–)
T-bills, stock at year-end 128 (135) 128 (148) 158 (–)
Foreign currency bonds 0 (21) 22 (0) 22 (–)
Note: Previous forecast in parentheses.
Table 2 Central government finances – key figures
Budget balance (SEK billion) 31 (-15) -49 (-51) -60 (–)
Central govt. debt (SEK billion) 1 030 (1 081) 1 088 (1 130) 1 141 (–)
Central govt. debt (% of GDP) 16 (18) 17 (18) 17 (–)
General govt. debt (% of GDP) 31 (31) 32 (32) 32 (–)
Note: Previous forecast in parentheses.
Table 3 Swedish economy – key figures
GDP growth (annual rate in %) -0,8 (-0,7)  0,2 (1,3)  2,0 (–)
Unemployment (% of labour force) 7,6 (7,7)  8,3 (8,3) 8,2 (–)
CPIF inflation (annual rate in %) 5,9 (6,0) 2,5 (1,6) 1,8 (–)
Note: Previous forecast in parentheses.

Central Government Borrowing – Forecast and Analysis 2023:3.

The report will be presented at a virtual press conference today, 26 October, at 10:00 a.m. Follow the live stream.

Journalists can e-mail questions to press@riksgalden.se. Questions asked directly before and during the press conference will be answered during the live stream. 

Press inquiries

Mats Lilja, press officer

The Debt Office's operations shall be characterized by an openness to the public and the media. The right of access to official business is a cornerstone of Swedish democracy.

Our press officer helps you get in touch with the right person so that you can get your questions answered quickly and easily. He can also provide you with material, answer comprehensive questions about our business and upcoming publications.

Mats Lilja, press officer
Press phone (office hours): +46(0)8-613 47 01, mobile +46(0)721-561 527
E-mail: Mats Lilja