The Swedish central government payments resulted in a deficit of less than SEK 1 billion in 2010. The budget is therefore practically in balance. It is a big improvement compared with 2009. This is due to the strong recovery in the Swedish economy, which led to higher tax income, while expenditure growth was moderate. In addition, more than half of the deficit in 2009 consisted of on-lending to the Riksbank in order to strengthen the currency reserve.
Compared to 2009 the deficit decreased by as much as SEK 175 billion. More than half of this is explained by on-lending to the Riksbank in 2009. The remainder can be directly linked to the rapid recovery in the economy, which clearly illustrates the central government budget’s sensitivity to the business cycle.
Interest payments on central government debt totaled SEK 23 billion, which was SEK 8 billion lower than in 2009. This is mainly explained by lower interest payments in foreign currency, due to market yields have been lower and loans with high coupons have matured.
The Debt Office’s latest forecast was a deficit of SEK 5 billion. The difference to the outcome is due to larger tax income and an extra dividend from the Swedish Export Credit Corporation.
Central government debt was SEK 1,151 billion at the end of 2010. That corresponds to 35 per cent of GDP. The Debt Office’s latest debt forecast was SEK 1,155 billion.
Smaller deficit than calculated in December
Central government payments showed a deficit of SEK 97.7 billion in December. The deficit was thus SEK 4.7 billion smaller than our latest forecast. The difference is mainly explained by larger tax income and an extra dividend from the Swedish Export Credit Corporation.
Interest payments on central government debt were SEK 13.2 billion, which was SEK 1.7 billion higher than calculated. This is explained by exchange rate losses.
The outcome for January will be published at 9:30 am on 7 February 2011.