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Swedish state finances are strengthened as Riksbank repays loans

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Swedish state finances are strengthened as Riksbank repays loans

The recovery of the Swedish economy continues, after a temporary dip during the beginning of the year, thereby gradually strengthening central government finances. But other factors also have a major impact on the budget this year and in 2022. The pandemic remains at the forefront of the development, with fiscal policy measures increasing expenditure. At the same time, the budget balance gets a boost when the Riksbank repays foreign currency loans raised by the Debt Office.

After the coronavirus pandemic led to a budget deficit of SEK 221 billion last year, the Swedish National Debt Office’s new forecast shows a deficit of SEK 63 billion this year and a surplus of SEK 30 billion in 2022. The strengthening of the budget balance is driven by the Riksbank repaying loans raised by the Debt Office for the foreign exchange reserves, as well as by the economic recovery. However, this is largely counteracted by the costs of both new and extended fiscal policy measures.

“We have not made it through the pandemic yet. In terms of the Swedish economy, we are seeing positive signs even if the improvement is relatively slow,” says Hans Lindblad, Director General of the Debt Office.

Forecast for Swedish economy and central government finances

Previous forecast (Oct ’20) in parentheses

2020 outcome



GDP growth (%)

-2.8* (-3.5)

2.4 (3.8)

4.0 (3.4)

Unemployment (% of labour force)


8.6 (9.2)

7.5 (8.2)

Budget balance (SEK billion)


-63 (-80)

30 (-25)

Central government net lending (SEK billion)


-140 (-114)

-47 (-13)

Central government net lending (% of GDP)

-3.4* (-3.8)

-2.7 (-2.2)

-0.9 (-0.2)

Central government debt (SEK billion)


1,348 (1,408)

1,324 (1,436)

Central government debt (% of GDP)

26* (27)

26 (27)

25 (26)

Maastricht debt (% of GDP)

40* (40)

40 (41)

38 (41)

* The outcome for GDP in 2020 is not available. The figure refers to the Debt Office’s most recent forecast (February 2021).

Bond borrowing is redistributed from kronor to foreign currency

Because the borrowing in foreign currency for the Riksbank will cease, the Debt Office is redistributing part of its own bond borrowing from kronor to foreign currency. This is in order to maintain a presence in the international capital market.

To provide room for foreign currency borrowing for the central government, the Debt Office is lowering the issuance volume of nominal government bonds to SEK 4.5 billion per auction starting in August 2021, instead of raising it as previously announced. The Debt Office will issue bonds in foreign currency for the equivalent of SEK 17 billion per year in 2021 and 2022. Raising loans in foreign currency does not involve an increase in the currency exposure of the central government debt, because the loans are hedged. Otherwise, no major changes are being made to the borrowing plan.

Central government borrowing, SEK billion

Previous forecast (Oct 20) in parentheses

2020 outcome



Nominal government bonds


96 (105)

90 (110)

Inflation-linked bonds


21 (21)

21 (21)

Green bonds


0 (0)

0 (0)

Treasury bills (stock at year-end)


185 (188)

225 (175)

Foreign currency bonds


17 (61)

17 (58)

– for on-lending to the Riksbank


0 (61)

0 (58)

– for the central government


17 (0)

17 (0)

Central government debt levels out then falls

The central government debt was SEK 1,280 billion at the end of 2020, corresponding to 26 per cent of GDP. This year the debt is expected to increase to SEK 1,348 billion, before decreasing to 1,324 billion in 2022, which corresponds to 26 per cent and 25 per cent, respectively, of GDP.

The consolidated debt for the entire public sector according to the Maastricht measure is expected to decrease from 40 per cent of GDP at the end of 2020 and 2021 to 38 per cent at the end of 2022. This is the measure used in the fiscal policy framework for the so-called debt anchor to keep the debt at around 35 per cent of GDP (±5 percentage points).

Central Government Borrowing – Forecast and Analysis 2021:1, PDF see report below.

The report will be presented at a digital press conference today, 24 February, at 10:00 a.m. CET.

Link to live stream of the press conference (in Swedish).

Journalists will be able to send in questions to be answered during the press conference. For further information or interview inquiries, contact our press function.


Debt Office press telephone: +46 (0) 8 613 47 01, e-mail:

The Debt Office is the Swedish government’s financial manager. Our mandate includes central government borrowing and debt management. The aim is to do this at the lowest possible cost while avoiding excessive risk. In the report Central Government Borrowing – Forecast and Analysis, published three times a year, forecasts are presented for the macroeconomic development and budget balance for the next two years. On the basis of these forecasts, the Debt Office calculates how much the government needs to borrow and sets up a plan for borrowing that is also included in the report.


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