Swedish Treasury Says Tax Cuts Are Too Large as Deficit Widens

The national debt will rise this year and next year and is thus above the so-called debt anchor of 35 percent of GDP, according to the authority's forecast.

The deficit in public administration this year will be SEK 143 billion. Lower food VAT and lower employment tax are some of the reasons.

"The economic measures that the government has chosen to implement are far too extensive and erode the state finances more than necessary," says Helena Kaplan, head of forecasting at the State Administration, in a press release.

Next year it will be minus SEK 89 billion.

"Therefore, there is no room for unfunded fiscal policy in 2027 according to our current forecast. As we have pointed out previously, the fiscal framework is not being adhered to," says Helena Kaplan.