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When the government presents its spring budget on Wednesday morning, much of the content is already known. The Corona crisis has forced the government and the associated Center and Liberal centers to submit five additional amending budgets worth more than SEK 100 billion.
Finance Minister Magdalena Andersson (S).
Photo: Jessica Gow / TT
The government notes in the spring budget that the corona center has had serious consequences for economic development both in Sweden and abroad. The assessment is that both the world economy and the Swedish economy are entering a recession with strong negative GDP growth in 2020. At the same time, the situation appears bleak in the labor market with extensive warnings and bankruptcies.
A greater fiscal margin is needed to mitigate the crisis, the government believes. Therefore, the spring bill proposes that the ceiling for central government spending in 2020 be increased from SEK 350 billion to SEK 1,742 billion.
“In light of the exceptional situation, the government considers it important to be able to take the necessary measures, something that the established level of the maximum spending limit does not allow,” the government writes.
In the spring budget, a total of SEK 5.7 billion is allocated to the fund. Unemployment is expected to rise to 9.0 percent by 2020, but in an alternative scenario where the crisis deepens, it may end at 13.5 percent.
Government evaluation is that the crown crisis suites will last for several years.
In addition, large government deficits are expected. Public sector financial savings are forecast to decline this year to -3.8 percent of GDP. However, the Minister of Finance’s assessment is that Sweden’s finances are strong enough to cope with the recession.
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