Mixed Economic Outlook for Swedish Municipalities in Latest SKR Report
The latest SKR report reveals a mixed economic outlook for Swedish municipalities, with signs of recovery amid ongoing regional challenges.
Key Points
- • Municipalities expected to achieve a financial result of 17 billion kronor in 2025, up from 16 billion in 2024.
- • Only 18 municipalities anticipate breaking even or losses, a significant decrease from 104 last year.
- • Eight regions are budgeting for negative or near-zero results, indicating ongoing challenges at the regional level.
- • A growing interest in vocational programs is noted, shifting focus from traditional higher education.
On May 19, 2025, the Swedish Association of Local Authorities and Regions (SKR) released a new economic report detailing the current state and trends in municipal finances across Sweden. According to the assessment by chief economist Emelie Värja, while many municipalities are seeing signs of recovery, the overarching economic climate remains tempered by global uncertainties.
The report indicates that municipalities are projected to achieve a combined financial result of 17 billion kronor this year, which marks an increase from the 16 billion kronor expected in 2024. This improvement is notable, especially considering that a mere 18 municipalities anticipate breaking even or reporting losses—an impressive drop from the previous year's figure of 104 municipalities.
Despite these positive shifts at the municipal level, eight regions are still struggling, budgeting for negative or near-zero results. This disparity points to ongoing financial challenges at the regional level, highlighting that while local governments are experiencing some recovery, broader economic issues persist. Värja emphasized that the low economic conditions are heavily influenced by a decline in tax bases and consumer purchasing power, exacerbated by significant demographic shifts including an increase in the elderly population and a decline in the youth demographic.
The SKR's findings also suggest a growing trend within education, with a substantial increase in interest toward vocational programs over traditional higher education preparatory tracks. As noted by Carin Clevesjö of the Swedish Schools Inspectorate, this shift reflects changing priorities, potentially aligning better with local labor market demands.
In summary, while municipal finances in Sweden show initial signs of stabilization and improvement, the overall landscape remains complex, with regional disparities and demographic challenges continuing to influence the economic outlook.