Sweden Readies Infrastructure Boom to Help Lower Unemployment

Sweden’s government will work to reverse a 30-year stagnation in public and private investments to meet its main pledge of lowering unemployment.

Finance Minister Magdalena Andersson said there’s a big potential, since public investments as a share of the Swedish economy have been stable since the 1980s while private investments have dropped. The Social Democratic-led government will target spending on roads and railways, including high-speed networks to connect the biggest cities, she said. It will encourage investments in projects by the state-run pension funds, and look at setting up debt-financed projects, she said.

“For example, you can look at if you can do the same thing with high-speed railways, these are pretty big sums,” she said Sunday in an interview after a speech at a party congress in the Swedish city of Vaesteraas. “It will be more defined in the infrastructure proposal next autumn.”

The government has previously flagged it was considering carving out a separate plan to raise spending on infrastructure and housing to create jobs. Still, the party congress agreed to reject calls to create an investment budget outside the regular state spending plan.

Andersson, whose Social Democratic minority government took over last year, is running up against budget constraints to meet a promise of reducing unemployment to the lowest in the European Union by 2020, levels not seen in more than a decade. The government forecasts budget deficits through 2017 and has pledged to fully finance all spending measures.

She said on Sunday that the government will ultimately be judged on bringing down unemployment, fixing the schools while keeping the fiscal ledgers in order.

Housing construction and refurbishments of low-income housing blocks, “will create a lot of jobs” she said. ‘We’ll also invest more in education. There’s a number of areas where we’ll work.’’