Despite Billion-Lift – Still Tough for Municipalities

From billion deficits to a clear brightening. Next year, the country's municipalities and regions are expected to make a combined profit of 28 billion kronor. However, the situation remains critical in some areas, according to SKR's economic report.

» Published:

Despite Billion-Lift – Still Tough for Municipalities
Photo: Claudio Bresciani/TT

Share this article

The economic situation for Sweden's municipalities and regions has been a major political issue in recent years, with rising inflation and increased expenditure putting significant pressure on operations.

In 2024, the municipal sector is expected to have the worst economic result of the 2000s – with a deficit of 8 billion.

But now, a significant improvement is expected for the sector. Not only because the government allocated 7.5 billion kronor to the sector in the autumn budget. The lower inflation rate means that municipalities' pension costs will decrease significantly in the coming years, the same applies to regions, according to the municipal sector's interest organization SKR.

Weaker for regions

Next year, the sector is expected to make a total surplus of 28 billion kronor, 25 billion for municipalities and 3 billion for regions. But not all municipalities and regions are equally fortunate.

— This means that several regions will still not reach a plus level, which would be the third year in a row, notes SKR's chief economist Annika Wallenskog.

It also requires fairly large measures to achieve this result of three billion.

The surplus will not be enough for the major investments needed, primarily in infrastructure, writes SKR in the report. This includes, among other things, water and sewage systems as well as climate adaptations.

The situation is worst for rural municipalities, which often have extensive water and sewage systems. SKR notes that there can be a 500 percent difference between different municipalities' water and sewage taxes.

An additional challenge

An additional challenge is demographic changes when the elderly become increasingly numerous while fewer children are born.

For regions, the effects of the pandemic also persist, notes SKR. Many regions are still working to catch up on postponed care. Another consequence is the impact the pandemic has had on public transport as a result of remote work. This means a loss of revenue, and according to SKR, it will take until 2028 for travel to return to pre-pandemic levels.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

US Inflation Matches August Expectations

US Inflation Matches August Expectations

ECB Keeps Interest Rates Steady

ECB Keeps Interest Rates Steady

Novo Nordisk to End Remote Work in 2024

Novo Nordisk to End Remote Work in 2024

Switzerland Suggests Moving Gold Refineries to USA to Lower Tariffs

Switzerland Suggests Moving Gold Refineries to USA to Lower Tariffs

Klarna's Stock Market Debut Attracts Swedish Small Investors

Klarna's Stock Market Debut Attracts Swedish Small Investors

Oil Demand Surpasses Expectations for 2026, Says IEA

Oil Demand Surpasses Expectations for 2026, Says IEA

Stockholm Stock Market Rises Slightly as Rusta Drops 13 Percent

Stockholm Stock Market Rises Slightly as Rusta Drops 13 Percent

Swedish Dockworkers' Union and Employers Reach Agreement Ending Dispute

Swedish Dockworkers' Union and Employers Reach Agreement Ending Dispute

Technology Industry Faces Weak Growth, Says Teknikföretagen Report

Technology Industry Faces Weak Growth, Says Teknikföretagen Report

Food Prices Drop for First Time This Year in Sweden

Food Prices Drop for First Time This Year in Sweden

Noba to Join Stockholm Stock Exchange with Existing Shares

Noba to Join Stockholm Stock Exchange with Existing Shares

Rusta Reports Decreased Profit Despite Increased Sales

Rusta Reports Decreased Profit Despite Increased Sales

Sweden's Labor Market Faces Slow Recovery Despite Job Gains

Sweden's Labor Market Faces Slow Recovery Despite Job Gains

Nikkei 225 Hits New Record Amid Wall Street Optimism

Nikkei 225 Hits New Record Amid Wall Street Optimism

Klarna's NYSE Listing Boosts Growth and Talent Attraction

Klarna's NYSE Listing Boosts Growth and Talent Attraction

Oracle Surges 36% on NYSE, Overtakes Klarna's Major Listing

Oracle Surges 36% on NYSE, Overtakes Klarna's Major Listing

Klarna's Stock Surges 30% in Initial New York Trading

Klarna's Stock Surges 30% in Initial New York Trading

Klarna CEO Outlines Strategy to Dominate Global Payment Market

Klarna CEO Outlines Strategy to Dominate Global Payment Market

SEC Challenges Global Sustainability Reporting Standards

SEC Challenges Global Sustainability Reporting Standards

Spotify Introduces High-Resolution Sound for Premium Users

Spotify Introduces High-Resolution Sound for Premium Users