UK markets open in 4 hours 11 minutes
  • NIKKEI 225

    27,999.82
    -163.01 (-0.58%)
     
  • HANG SENG

    17,990.04
    +692.10 (+4.00%)
     
  • CRUDE OIL

    77.96
    +0.72 (+0.93%)
     
  • GOLD FUTURES

    1,747.80
    +7.50 (+0.43%)
     
  • DOW

    33,849.46
    -497.57 (-1.45%)
     
  • BTC-GBP

    13,566.85
    +15.62 (+0.12%)
     
  • CMC Crypto 200

    383.45
    +3.16 (+0.83%)
     
  • ^IXIC

    11,049.50
    -176.86 (-1.58%)
     
  • ^FTAS

    4,098.49
    -13.82 (-0.34%)
     

Sweden faces weaker public finances next year, debt office says

FILE PHOTO: Woman strolls through the Sodermalm area of Stockholm

STOCKHOLM (Reuters) - A rapid slowdown in the Swedish economy will lead to weaker central government finances next year and to an increased borrowing requirement, the national debt office said in a statement on Thursday.

"Since the May forecast, we have seen inflation continue to rise and interest rates increase, while the economy is slowing down", the Debt Office said in a statement.

"This creates an increased borrowing requirement for the central government, which the Debt Office is financing with short-term borrowing," it said.

The Debt Office said the budget balance would be adversely affected by expected disbursements of electricity price compensation and said it saw a budget surplus of 91 billion Swedish crowns ($8.4 billion) this year and 27 billion in 2023, compared to 102 billion and 75 billion in the May forecast.

It forecast that Sweden's gross domestic product would grow with 2.4% this year and fall by 1.0% in 2023, compared to gains of 2.2% and 1.8% respectively seen in May.

Inflation was seen averaging 7.8% this year and 5.4% next year compared to 5.5% and 2.8% in May.

It said that government debt was expected to decrease to 18% of GDP at the end of 2024, compared to 22% at the end of 2021.

($1 = 10.8660 Swedish crowns)

(Reporting by Terje Solsvik, editing by Anna Ringstrom)