A general view of the archipelago next to Stockholm in the Baltic sea, Sweden, May 7, 2017. REUTERS/Ints Kalnins
April 10, 2019
STOCKHOLM (Reuters) – Sweden’s spring mini-budget on Wednesday contained reforms totaling 4.5 billion crowns ($486 million) and highlighted the center-left coalition government’s focus on climate change.
The spring budget is mainly an adjustment to the main budget in the autumn. In 2018, the opposition forced its budget through a hung parliament, a measure which included 20 billion Swedish crowns ($2.16 billion) in tax cuts and left Social Democrat Finance Minister Magdalena Andersson little room for new spending.
While debt is at its lowest since the late 1970s, the government has prioritized strong finances and Andersson said new spending would be offset by cuts in other areas.
“The economic situation in Sweden has improved in recent years and growth has been high,” Andersson said in a statement.
“However, in recent times there have been several indicators to suggest that economic development has dropped somewhat, which indicates that growth will slow in 2019.”
Measures in the budget included 2.0 billion crowns in measures to fight climate change, 1.1 billion to cut employers labor taxes and 900 million for teaching assistants in schools.
The measures were all well flagged by the government of the Social Democrats and Greens.
The budget was the first chance for the minority coalition to put its stamp on fiscal policy since taking power in January.
However, Andersson’s hands are tied by an agreement with two centrer-right parties who back the government. Under the cross-party deal, the government has said it will cut income taxes for top earners from the start of next year, increase climate taxes and take steps to deregulate the labor market.
(Reporting by Johan Ahlander, Simon Johnson and Anna Ringstrom; Editing by Angus MacSwan)