Finance Minister Elisabeth Svantesson (M) says the Swedish economy is strong, despite concerns around the world. She says the Swedish economy is "Trump-proof".
- "Regardless of what Donald Trump comes up with in the next few days or weeks, the Swedish economy is very stable. We have world-class government finances, we have room for manoeuvre and a protective barrier around the Swedish people. We can do more if needed," Svantesson says as she presents the government's spring budget.
But there are also significant risks ahead. The most significant uncertainties revolve around the fragile ceasefire in the Iran conflict, shipping in the Strait of Hormuz, and the effects on energy prices.
If this continues and is prolonged, it will have major effects, Svantesson says.
Increase consumption
For the recovery to gain momentum, the government needs to give households hope for the future, Svantesson believes. More than half of the spring budget's SEK 7.7 billion in investments go to temporarily lowering taxes on gasoline and diesel and providing electricity subsidies to households. On April 1, the VAT on food was halved.
"We want households to shop, go to the bakery, get a haircut, maybe take a trip. It's about getting the wheels moving," Svantesson says.
The government is spending SEK 1.6 billion over five months on lowering fuel taxes. However, for the individual, it doesn't add up to much. It will be about 120 kronor in savings for someone who drives a diesel car 1,400 km a year and 230 kronor for someone who drives a petrol car 900 km a year.
Is it wise to spend so much money on this?
"I wouldn't have done it if I didn't think it was wise," Svantesson says.
In the autumn, the government could spend another SEK 8 billion on lowering fuel taxes, if the European Commission gives the green light. Then the tax could be temporarily reduced by three kronor per liter on both gasoline and diesel. This roughly corresponds to an extra full tank at today's prices.
"Lazy governments"
The government has been criticized for borrowing for unfunded investments. Svantesson's counterargument is that the national debt is low and that the goal is to return to balance.
She warns that most of the room for reform for those who will govern after the autumn elections is mortgaged, so investments must be financed with savings, increased growth or increased taxes. But the latter is not an option for Svantesson.
"It's lazy governments that raise taxes," she says.
