The Swedish government has recently announced a spending package worth 17.3 billion kronor ($1.6 billion) to boost various sectors such as health care, the justice system, and employment in an economy that has been hit hard by recession. This move is part of the government’s commitment to maintaining a cautious fiscal policy that does not contribute to inflation.
Recent inflation data has shown a clear downward trend, prompting the government to make adjustments to its spending priorities. The package includes a 6 billion kronor increase for local governments responsible for health care, along with additional funds allocated to defense and infrastructure. Many of these initiatives have been previously announced.
Finance Minister Elisabeth Svantesson expressed her optimism about the slowing inflation and the prospect of transitioning towards a more normalized fiscal policy in the current phase of the economic cycle. She emphasized the government’s commitment to providing support to sectors most heavily impacted by inflation.
The inflation figures released recently indicate that price increases are nearing the central bank’s 2% target, potentially paving the way for interest rate cuts in the coming months. This move could provide much-needed relief to an economy that saw three consecutive quarters of contraction in 2023. The government’s growth forecast for this year is at 0.7%, with unemployment expected to rise to 8.3% from 7.7% in 2023.
