Reinfeldt Says Sweden Won’t Reach Surplus Target Until 2017

Prime Minister Fredrik Reinfeldt said Sweden won’t reach its surplus target until 2017 as the governments stimulates the largest Nordic economy to boost job creation.

“To secure a stable development and lower unemployment it’s reasonable to return to a surplus of 1 percent of GDP only when resource utilization nears balance,” he said yesterday in a speech at the opening of the Stockholm parliament’s 2013/2014 session. “This is expected according to our forecasts not until 2017.”

Sweden’s four-party coalition government will tomorrow present a budget for next year that includes 25 billion kronor ($3.9 billion) of initiatives to stimulate demand after the economy slumped last quarter. It will spend most of that on a fifth round of income tax cuts since coming to power in 2006.

Reinfeldt’s coalition, which was re-elected in 2010, is trailing in polls ahead of elections in September next year.

The government predicted last month that the largest Nordic economy will expand faster than previously estimated next year as it steps up stimulus plans. The $540 billion economy will grow 1.2 percent this year and 2.5 percent in 2014, compared with July forecasts of 1.3 percent and 2.1 percent, respectively, the Finance Ministry said.

“Our strong position should be used to give support for an economic recovery,” Reinfeldt said.

To contact the reporter on this story: Johan Carlstrom in Stockholm at jcarlstrom@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman in Oslo at jbergman@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.