There are a lot of billions going around these days. Over the last two months or so, the government has announced package after package to help citizens and businesses hang in there until the covid storm passes. The list is way too long to repeat here, but you can find it at the Swedish government site if you’re interested.
Meanwhile, what does it all add up to? Omni is reporting the state will be 400 billion (miljarder) kronor in the red by the end of the year. (In February of this year, the government expected the budget deficit to be 14 billion kronor. How times change. ) In all, SvD reports, the government is expected to have to borrow 212 billion kronor in government bonds this year and next. According to Riksgälden, the Swedish National Debt Office, this will be 31% of GDP (gross domestic product), up from 22% last year.
It could have been worse. Thanks to the good economic times over the last years, and because of the official government surplus objective, aka överskottsmålet, that forced the government to save for a rainy day (read more about this here), Sweden has a good buffer and good credit.
Still. Ouch. This is a huge hole that the 11% unemployment that the Debt Office is projecting for 2021 is not going to help.
First, people were talking about a V-shaped recovery or an L-shaped recovery, and now everyone’s hoping for at best a swoosh-shaped recovery à la Nike. Time to strap on some sneakers, because it’s going to be a ride.