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On Monday, the Finance Minister, Magdalena Andersson presented her budget in full. There were few surprises, as many of the details had already been announced in previous weeks. Nonetheless, the high-level messages were clear.
Firstly, the government says that the current status of the economy is “serious”. With many parts of the world still in various stages of lockdown, it could hardly say anything else. Nonetheless, this view is mitigated by the context, including that the Swedish economy already seemed to have bottomed in the second quarter.
The second point is that Sweden’s outlook is already much better than it was just 3 months ago. In that period the government has revised up the 2020 GDP forecast from -6.0% to -4.6%. Growth next year is forecast to rocket by 4.1%.
Thirdly, Sweden has a large balance sheet to deploy, and the government now intends to do that, with SEK 105 billion of extra spending in 2021 and SEK 85 billion in 2022.
Fourthly, the government will increase its commitment to greening the economy. Mundus Nordic Green News has already outlined the reform proposals, including an extra SEK10 billion which among other things will fund the development of fossil-free aircraft, toughening up the scheme to penalise fossil-fuelled cars, incentivising freight transport by rail and production support for biogas.
Finally, the government will now address other challenges that have become increasingly obvious in Swedish society. New spending is being put forward to meet the long-term problems of society: unemployment, climate change, the growing needs for welfare, the gap between city and country, the lack of integration, and failures in schools and crime.
For those in the right sectors, it could be an exciting time ahead. As other news shows, the house (not flat) market is booming again, and Sweden’s investment in tech is creating some true global champions, with Spotify being joined by Klarna on the podium, and perhaps others, like Tink following after. The greentech sector is also emerging. SEBs announcement that it is opening a specialist green VC-lending arm is a clear indication of the commercial interest effervescing.