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Swedish state budget balance is zero as moderate growth determined on fragile groundTuesday, 19 June 2012
The deficit in public finances this year stood at Skr22 billion, or 0.6 percent of gross domestic product (GDP).
Even next year there will be deficits, traced the country’s Financial Management Authority Ekonomistyrningsverket (ESV) in a new forecast.
Central government budget this year is expected to be Skr-8 billion, a decline of about Skr75 billion compared to 2011.
Next year, the deficit in the national budget is expected to be Skr17 billion, according to ESV.
"Public finances are relatively good, despite the current economic situation, but does not reach quite up to the surplus target that was expected. In other words, there is no room for unfunded reforms, at least in the near future. These would help to further deviation in relation to the surplus target, "writes Ekonomistyrningsverket.
The slowdown in the Swedish economy means that general government tax revenue will grow only by a moderate 2.4 per cent this year, pulled down mainly by taxes on consumption and capital. Taxes on capital, the most volatile type of tax, will fall because corporate earnings decline when exports of goods and services are hit by a weak external demand. Taxes on capital from the household sector will also fall as interest income and capital gains decrease.
Total expenditure in the central government budget will grow by 3.1 per cent this year, due primarily to a temporary increase in the National Debt Office's net lending. Expenditure will then drop back in 2013 and 2014 before climbing again in 2015, due mainly to a temporary rise in interest expenditure. The overall increase in expenditure during the forecast period is a moderate 3.3 per cent in nominal terms. As a proportion of GDP, however, expenditure will fall from 23 per cent in 2011 to 19 per cent in 2016.
By Scancomark.se Team/ News Source: The Swedish National Financial Management Authority (ESV).
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