"If you increase expenditure a lot now - unfinanced spending - we know it would have an impact on inflation."
The government had already announced plans to allocate more
money to the military, adult education and for a temporary
increase in housing allowance for households struggling with the
cost of living crisis, measures totalling around 4 billion
Swedish crowns ($388 million).
The spring budget is used to adjust spending, not for big
policy initiatives, but Svantesson sketched out broad plans to
boost job growth and increase spending on criminal justice and
defence in the years ahead.
State finances are strong - Sweden's national debt is among
the lowest in Europe at 31% of GDP - and the National Institute
for Economic Research reckons the right-wing government can
boost spending by around 100 billion crowns in budgets covering
the 2024-2027 period.
But much of that will be eaten up by the government's
promises to raise military spending to 2% of GDP as part of
Sweden's bid to join NATO, plug holes in the welfare system
exposed by the pandemic, and finance the shift to a "green
economy".
Svantesson said that the government still planned to cut
income taxes, cap benefits and introduce a controversial measure
to reduce diesel and petrol prices by lowering the amount of
biofuels that are added in but that these would come in later
budgets.
Sweden's three-party minority coalition is kept in power by
the populist, anti-immigration Sweden Democrats who want to
reduce the country's climate commitments and boost welfare
spending, making policy planning for the government tricky.
($1 = 10.3047 Swedish crowns)
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Swedish economy: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Simon Johnson, Johan Ahlander and Terje Solsvik;
editing by Niklas Pollard and Hugh Lawson)
