Full steam ahead for Swedish economy in new three-part budget bill

Sweden has won the fight against inflation and expects GDP to grow next year, Finance Minister Elisabeth Svantesson proudly proclaimed as she presented the government’s budget bill for 2025.

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“Going forward, the task will be to ensure that high inflation does not return, and at the same time to implement reforms and investments that build a more prosperous, safer and more secure Sweden for generations to come,” said Svantesson in a statement on Thursday morning.
The government predicts that Swedish GDP will grow 2.5 percent next year followed by 3.2 percent 2026.
Unemployment, however, is expected to remain unchanged at 8.3 percent in 2025, only beginning to drop in 2026 (7.9 percent, according to the government’s predictions, followed by 7.6 percent in 2027).
Svantesson told a press conference that a strong focus on economic growth would create jobs.

The 2025 budget, worked out in collaboration between the right-wing government coalition and far-right Sweden Democrats, is far more expansionary than the restrained budget Svantesson presented last year when Sweden was still fighting high inflation: 60 billion kronor towards new reforms rather than 39 billion kronor for 2024. Almost half, 27 billion kronor, will go towards funding lower taxes.
ANALYSIS:

How will Sweden’s new budget affect foreign residents?

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Svantesson highlighted three areas in which new reforms are prioritised:

Strengthening household purchasing power after several years of the high cost of living putting a strain on household budgets, with reforms set to push the tax burden to its lowest level since 1980, according to the government.

Reinstating the “work first” principle, meaning that people should work rather than live on benefits. Some of the measures include language training for parents born abroad and increasing the number of places in vocational adult education.

Increasing growth, focusing on investments in research, infrastructure and electricity supply.

In the debate in parliament on Thursday, the centre-left opposition is expected to criticise the government for lowering taxes for high earners and not investing enough in welfare. 
Investments in healthcare, social care and education are significantly reduced in this budget compared to last year: down from 16 billion kronor to 7.5 billion kronor. 
Meanwhile, the hike of the employment tax credit (jobbskatteavdraget) – a tax reduction given to people who pay tax on their job income – is expected to lead to a 3,671 kronor tax cut for people on the median salary of 462,000 kronor per year.

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“Going forward, the task will be to ensure that high inflation does not return, and at the same time to implement reforms and investments that build a more prosperous, safer and more secure Sweden for generations to come,” said Svantesson in a statement on Thursday morning.
The government predicts that Swedish GDP will grow 2.5 percent next year followed by 3.2 percent 2026.
Unemployment, however, is expected to remain unchanged at 8.3 percent in 2025, only beginning to drop in 2026 (7.9 percent, according to the government’s predictions, followed by 7.6 percent in 2027).
Svantesson told a press conference that a strong focus on economic growth would create jobs.
The 2025 budget, worked out in collaboration between the right-wing government coalition and far-right Sweden Democrats, is far more expansionary than the restrained budget Svantesson presented last year when Sweden was still fighting high inflation: 60 billion kronor towards new reforms rather than 39 billion kronor for 2024. Almost half, 27 billion kronor, will go towards funding lower taxes.
ANALYSIS:
Svantesson highlighted three areas in which new reforms are prioritised:
In the debate in parliament on Thursday, the centre-left opposition is expected to criticise the government for lowering taxes for high earners and not investing enough in welfare. 
Investments in healthcare, social care and education are significantly reduced in this budget compared to last year: down from 16 billion kronor to 7.5 billion kronor. 
Meanwhile, the hike of the employment tax credit (jobbskatteavdraget) – a tax reduction given to people who pay tax on their job income – is expected to lead to a 3,671 kronor tax cut for people on the median salary of 462,000 kronor per year.