Debt office forecasts boost to state coffers

The Swedish National Debt Office (Riksgälden) has forecast that state finances will recover quicker than expected, according to a new report.

The state budget deficit is expected to amount to 53 billion kronor ($7.4 billion) in 2010, 11 billion kronor above a previous forecast, the office stated in its new report.

The budget deficit is expected to shrink to 37 billion kronor in 2011, 4 billion up on previous forecasts.

The reasons behind the stronger figures lie unemployment figure remaining lower than feared.

Despite the increase in total national debt, it will remain under 40 percent of GDP. By the end of 2011 the national debt is forecast to amount to 1.28 billion kronor – equating to 38 percent of GDP.

The debt office described Sweden’s state finances as sound and thus deemed that there is scope for new government investment before the autumn election, even if this is not included in the projections.

“A package of 10 billion kronor would naturally affect our forecast, but the government could do so, in contrast to a slew of other countries,” debt office head Bo Lundgren said.

As a result of the more upbeat forecast, the national debt office does not now intend to amend its borrowing plans, according to a statement.

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