STOCKHOLM (Reuters) – Sweden plans to ease tight budget spending rules, Swedish media reported on Thursday, as it looks to boost spending in areas like infrastructure and defence.
The government, the Sweden Democrats and the opposition Social Democrats have agreed to target a balanced budget instead of aiming for a surplus of 0.33% of GDP over a business cycle, daily Expressen said, citing a parliamentary committee tasked by the government to make recommendations.
“Targeting a balance would give … sufficient margins,” Hans Lindberg, head of the committee, told a news conference according to news agency TT.
“And it would give a budget window of 25 billion crowns ($2.38 billion) a year,” he said.
At a time when countries like France are struggling to cut spending after years of living above their means, Sweden has rock solid public finances.
Debate has focused in recent years on whether public debt, at around 30% of GDP versus a European average of around 90% – is actually too low and that tight fiscal rules, introduced after a domestic financial crash in the early 1990s, are holding back economic development.
The government has already promised to boost spending by around 60 billion crowns next year.
($1 = 10.5216 Swedish crowns)
This post is originally published on INVESTING.
