The coming weeks will see the budget for next year being negotiated between the government and the Sweden Democrats. The National Institute of Economic Research (KI) has announced that it sees a reform space of 34 billion kronor for 2026, that is, how large unfunded investments the government can make.
If it is enough to get the Swedish economy going, Finance Minister Elisabeth Svantesson does not want to answer at present.
It is KI's assessment of what they think we will have. Then we make our own assessment, which I will return to at the end of August, she says and continues:
But from The Moderate Party's side, we have made a promise to do more for families. Households have paid a high price during these years with high inflation, they need to be strengthened so that they can feel safe, she says.
Trump ruined the recovery
For it is household consumption that is weighing on the Swedish economy, according to KI, which on Wednesday therefore revised down its growth forecast for 2025.
Elisabeth Svantesson does not rule out that the government will also need to write down its forecast.
So it can absolutely be. There is still a dampened demand in the economy.
It is not a matter of anything other than that the longed-for recovery that we saw at the end of last year was broken by Trump's trade war. He has created uncertainty in both Sweden and in most other countries.
Already in June, the Ministry of Finance wrote down the growth forecast significantly, from 2.1 to 0.9 percent for the full year.
”Moving towards brighter times”
Svantesson believes that Trump's policy, combined with the fact that we are coming from a period with high interest rates and high inflation, has made households more cautious.
Even if we do not see that either inflation or interest rates will rise to any great extent in the coming years, it is still in the back of our minds, she says and continues:
But now the tariff decision from the US has begun to take effect. I would think that households will have greater optimism regarding consumption in the years to come. We also see that we are moving towards brighter times, the recovery will take off.
