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

Government Boosts Support for Sweden's Regional Airports

Government Boosts Support for Sweden's Regional Airports

Klarna CEO: Embracing "Swedishness" as a Key Asset

Klarna CEO: Embracing "Swedishness" as a Key Asset

Handelsbanken Swish Payment Disruption Resolved

Handelsbanken Swish Payment Disruption Resolved

Government Proposes Increased Export Credit Guarantees for Swedish Companies

Government Proposes Increased Export Credit Guarantees for Swedish Companies

AstraZeneca Halts UK Research Facility Expansion Plans

AstraZeneca Halts UK Research Facility Expansion Plans

Princess Madeleine's Skincare Brand Launch Draws Lukewarm Interest

Princess Madeleine's Skincare Brand Launch Draws Lukewarm Interest

Länsförsäkringar Swish Payment Issue Resolved

Länsförsäkringar Swish Payment Issue Resolved

Blind Box Trend Raises Concerns Over Consumer Behavior and Spending

Blind Box Trend Raises Concerns Over Consumer Behavior and Spending

France's Credit Rating Downgraded by Fitch

France's Credit Rating Downgraded by Fitch

Microsoft Gains Amid Mixed US Market

Microsoft Gains Amid Mixed US Market

FTC Investigates Google and Amazon Over Advertising Practices

FTC Investigates Google and Amazon Over Advertising Practices

US Proposes G7 Tariffs on China and India Over Russian Oil Purchases

US Proposes G7 Tariffs on China and India Over Russian Oil Purchases

Taco Bell Plans Expansion into Sweden with First Stockholm Location

Taco Bell Plans Expansion into Sweden with First Stockholm Location

Russia's Central Bank Makes Smaller Than Expected Interest Rate Cut

Russia's Central Bank Makes Smaller Than Expected Interest Rate Cut

ECB Officials Divided on Future Interest Rate Decisions

ECB Officials Divided on Future Interest Rate Decisions

Klarna CEO Secures Billion-Kronor Loan to Buy Out Co-Owner

Klarna CEO Secures Billion-Kronor Loan to Buy Out Co-Owner

Six Suspects in Consultant Scandal Face Charges After Spain Raid

Six Suspects in Consultant Scandal Face Charges After Spain Raid

Microsoft to Remove Teams from Office Package in EU Agreement

Microsoft to Remove Teams from Office Package in EU Agreement

UK Economy Growth Stagnant in July as GDP Remains Unchanged

UK Economy Growth Stagnant in July as GDP Remains Unchanged

German Inflation Rises to 2.2 Percent in August

German Inflation Rises to 2.2 Percent in August