STOCKHOLM (Reuters) -Sweden’s 2026 budget will inject about 80 billion crowns ($8.50 billion) into the economy, the government said on Monday, with the right-wing coalition hoping to speed up sluggish growth ahead of a general election next September.
“The strength of Sweden’s state finances is now being used to ensure that hard-working people get more money in their wallets,” the government said in a statement on the budget bill which is its submitting to parliament on Monday.
“This can increase confidence in the future and end the recession.”
Tax cuts for workers, pensioners and companies, lower VAT on food and more money for defence were among the main measures in the most expansive spending bill since the COVID-19 pandemic.
Most of the measures had already been announced.
The budget also contained more money for schools, healthcare and civil defence, as well as higher housing allowances for low-income families.
Sweden’s economy, like many in the EU, has been stuck in low gear with households and businesses uncertain about the impact of a global trade war launched by President Donald Trump and still hurting after a bout of inflation that peaked at over 10%.
But unlike countries like France which are struggling to cut spending and reduce debt while facing multiple economic challenges, Sweden has room for fiscal largesse. Government debt is about 32% GDP compared with about 90% across Europe.
Even after committing to spend 3.5% of GDP on defence and to borrow around 220 billion crowns to fund new nuclear power plants, debt is likely to remain under 35% of GDP.
($1 = 9.4165 Swedish crowns)
(Reporting by Simon Johnson and Stine Jacobsen, editing by Anna Ringstrom)
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