The government's own agency, the National Institute of Economic Research (NIER), sees room for unfunded reforms of around SEK 95 billion over the next four years, i.e. for the next government's term of office.
The calculations are based on assumptions that expenditure is not indexed up, but that tax revenue grows in line with economic growth. This automatically creates increased savings in the government's accounts, i.e. an unfunded budget space.
Today, Thursday, the government traditionally presents its assessment of the Swedish government finances at a press conference in Harpsund.
Elisabeth Svantesson has previously said that there is basically no budget space at all in the coming years. So it's not really that bad, according to KI.
“Half as big”
The government has a positive but small budget margin in its forecasts for the coming years. The government's budget margin is lower than in the National Institute of Economic Research's figures, about half as large for the coming three years, says KI Director Albin Kainelainen.
But historically, it's still a small amount of money.
We have looked back at all forecasts since 2015. And it is not extreme, but it is clearly lower compared to what it usually is, says Kainelainen.
The reason is that Swedish government finances are currently running large deficits, around SEK 200 billion this year and next year. Things look better in 2028, although there is still an estimated deficit, but then no new potential Ukraine money has been invested.
Defence investments are particularly large in these years, but they are still outside the budget.
“Not sustainable in the long term”
Despite that, there is no direct economic crisis, according to the KI director.
The national debt is still very low, but the deficits we have now are large compared with what it has been like over the last 30 years.
The question is how quickly politicians need to steer towards the balance target decided by the Riksdag.
It is not sustainable in the long term to have this type of deficit that we have now, says Kainelainen.
