The Swedish government is planning on splashing the next budget for 2026, promising expenses of 80 billion Swedish crowns, in order to kick-start the country after sluggish growth in recent years.
The current right-wing coalition government wants to invest more in education, healthcare, housing and civil defence. Finance Minister Elisabeth Svantesson attributed the possibility of those investments to Sweden’s strong public finances and low debt.
“We have world-class government finances; we have low government debt and while others are fighting with high debt costs, we are not,” she told reporters.
The government, a coalition of three centre-to-right parties that receives shadow support from the far-right Sweden Democrats, is drafting an expansive spending bill for 2026. They will propose a tax cut for workers, pensioners, and companies, as well as lower VAT on food, with the hope of providing a higher housing allowance for families. According to Svantesson, the positive impact on a family with two young children in kindergarten will be 1,800 crowns per month.
The measure is possible after years of fiscal restraint, leading to a low debt level, currently at 32% of Sweden’s GDP, lower than the average 90% across Europe. Prior commitments on defence spending and on new nuclear power plants will see the debt rise to 36.8% in 2027. Justifying the new budget, Svantesson said, “I have always been careful not to borrow for this or that. We should use our strength when we need it, and now we do.”
In the government’s plan, the new budget is set to boost the country’s growth to 3.1% in 2026, up from previous estimates of 2.6%. The growth and measures for citizens are also expected to increase government approval as we enter an election year. Next September, Sweden will vote for a new parliament, but the coalition’s approval rating has been spiralling for a while.
