Go to search feature Go to content

You need to use a different browser. To be able to use our internet services, you can instead use one of these browsers: Apple Safari, Google Chrome, Microsoft Edge or Mozilla Firefox.

Read more about recommended browsers

New Swedish government's economic policy yet to be presented

On Friday four of the Swedish parties – the Sweden Democrats (SD), the Moderates (M), the Christian Democrats (KD) and the Liberals (L) – presented the result of their negotiations over a new government. As for economic policies of the new administration, many details remain unclear, but there are some general outlines, according to our experts Marcus Widén and Elisabet Kopelman.

The nationalistic party the Sweden Democrats will not be included in the government, but have vowed to support it in parliament, in exchange for influence on its policy. Friday’s press conference focused much on issues such as migration, crime, defence, international aid and the health care system, rather than on short-term economic policies.

If elected on Tuesday, the government will have 21 days to finalize a new budget. The soon-to-be Prime Minister Ulf Kristersson stated that the first budget will not cover everything. Hence, we expect more policies to be presented next year, rather than within the coming weeks. Some outlines are, however, known:

  • There will be some tax cuts for low- and middle-income earners and pensioners, next to compensations for energy costs.
  • There will be a reduction in the tax on savings. The parties’ agreement also states that corporate taxation must be competitive and that conditions for small and medium-sized companies must be improved, without any detailed specifications.
  • There will be a reform regarding grants – with a ceiling for allowances and activity requirements for those living on welfare. The increase in the unemployment insurance, that was introduced during the pandemic, will however be kept, as demanded by the Sweden Democrats.

As we have previously stated, the new government will have a scope of some 30–40bn SEK in unfinanced reforms in this year’s budget. Although economic activity will turn negative, the Swedish public finances remain solid, not only from a historical perspective, but in particular in a cross-country comparison.