Svantesson's 2026 Budget: Billions to Boost Swedish Households

Finance Minister Elisabeth Svantesson (The Moderate Party) will present the budget proposal for 2026 on Monday.

A record amount is being invested in new initiatives. The opposition has called it election pork.

Of the 80 billion kronor, just over 47 billion will go to households, mainly through reduced income tax, reduced VAT on food, reduced electricity tax, reduced preschool tax and increased housing allowance.

This will give a typical family with a police officer, a nurse and two small children 1,800 kronor more per month. According to the Ministry of Finance's calculations, the contribution will be most noticeable for those with low incomes, at least if you count in percent of their income.

Will it gain momentum?

The government also hopes that the budget will increase the incentives to work more. The proposal announces that a benefit reform will be implemented in the coming years. Social benefits will be tightened while a job premium is introduced.

The Ministry of Finance estimates that the benefit reform and the reduced income tax will lead to 11,000 more people in work and 6,000 fewer unemployed within five years. In the forecast, unemployment is expected to fall from 8.7 percent this year to 8.3 percent next year.

Last autumn, when the budget for 2025 was presented, the government believed that Sweden would emerge from the prolonged low-growth period this year. That did not happen, due to concerns about a trade war.

This time, the government hopes that the Swedish economy will gain momentum as households start spending. And then the budget initiatives play a key role. The government does not expect the Swedish Central Bank to cut interest rates much more. And it does not expect any boost from the global economy either.

The forecast is that GDP will increase by 3.1 percent in 2026 compared to 0.9 percent this year.

Larger deficit

Of the 80 billion, companies will receive almost nine billion. This is mainly due to reduced employer contributions for young people, more favorable tax rules for small businesses and support for farmers.

Healthcare and schools will receive just over 10 billion in new budget initiatives.

The record-large initiatives, as well as support for Ukraine and the military buildup, are largely being financed with borrowed money. The deficit in the public finances is therefore expected to increase from 1.4 percent of GDP this year to 2.4 percent in 2026. This corresponds to 167 billion kronor.

However, at the Ministry of Finance, one is not worried. The deficit is expected to decrease again from 2027 and the national debt is still low, around 36 percent of GDP.

Peter Wallberg/TT