The Government today announced the financial forecast concerning the forthcoming budget for next year. They are surprisingly positive, but not everything is rosy in the Swedish economy, says echoes The domestic political commentator Frederick Furtenbach.
Was there anything that surprised ?
– I think it was surprisingly cheerful noises from Magdalena Andersson. If you look closer at the numbers the government is now a bit more optimistic than it was in June, but there are no major differences. Unemployment is expected to be slightly lower than the government previously believed. The deficit in the state treasury will be slightly smaller, the economy is largely in balance in 2018. And right it will be understood timely for the government who need to invest in the next election.
– But this does of course not all is peaceful and delight in the Swedish economy. Unemployment looks set to remain above six percent for several years. And the real momentum among Swedish export companies lingers. There are some bad signals to the outside world as well, including from China, and I believe that such government NIER is a major forecasters instead learn to adjust down their future forecast a bit.
The Government has promised to fund all its reforms without borrowing. It has few opportunities to invest in the budget in the autumn?
– I think we will see rather large investments in the fall. The government has already this spring announced investments of 13 billion. Moreover, it has money left over from tax cuts as announced and that it is not made of. The will that it teaches come up with new savings, Magdalena Andersson opened today to increase the tax increases that the government already presented.
– Some cost increases with the state, and it increases the deficit. For example, compensation for the sick, assistance benefit and the cost of accepting refugees. But that kind of increased costs borrows the state simply. Which does not apply the government principle that new spending will be paid with new savings, the principle only applies to reform.
The Social Democrats should not just agree with the Green Party, but also with the Left. How difficult will it be?
– Negotiations between the parties on how the state’s money will be used is of course always a tug of war. And the Left Party has issued a series of demands for the budget in the autumn. But the Left is a tactic that involves the requests of deserving initiatives that do not cost very much. For instance, more money for the care of young people with mental illness. And it is a tactic that so far seems to pay dividends.
– However, some savings that the Left asked for far more controversial. They have demanded a higher capital tax, for example, reinstated capital, and reduced interest deductions, which would thus give the more expensive mortgages. Although the pressure is increasing on the government to limit interest deductions teaches these savings will be much harder to get through.
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