Swedish Government Plans Support Measures Amid Prolonged Economic Downturn
Finance Minister Elisabeth Svantesson outlines government support plans amid economic downturn.
Key Points
- • Sweden faces prolonged economic downturn; growth forecast lowered to 0.9%.
- • Government aims to strengthen household finances and increase employment.
- • Planned measures may include tax cuts and higher child allowances.
- • Budget negotiations set to begin in two weeks focus on family support.
As Sweden grapples with a prolonged economic downturn, Finance Minister Elisabeth Svantesson announced on July 15, 2025, that the government is committed to implementing measures aimed at supporting households and families. During a press briefing, Svantesson emphasized the critical need to strengthen household finances amid rising public concern over economic stability and job security.
Recent economic forecasts have prompted the government to lower its growth projection for 2025 from 2.1% to just 0.9%. The revised forecast is largely attributed to ongoing global uncertainties, particularly the impact of U.S. trade policies. Svantesson noted that the precarious economic environment is dampening consumer spending, making it essential to focus on measures that can ease financial pressures on families.
The upcoming budget negotiations, which are scheduled to commence in two weeks, are anticipated to focus on fiscal relief strategies that could potentially include tax cuts and increased family allowances. Although some budgetary allocations are pre-committed to defense and judicial reforms, Svantesson highlighted that there remains room for discussions on reforms that could stimulate economic activity. She indicated that tax reductions on labor or electricity, along with an increase in child allowances, could be on the table as part of the government's response to the economic crisis.
In light of these developments, Svantesson stressed that raising taxes is not a viable option if the goal is to promote growth. She reiterated the government's commitment to closely monitor the evolving economic landscape and respond proactively in order to cushion the impact on the most affected households and enhance employment opportunities. The Finance Minister assured the public that further details of the government’s plan would be revealed following the budget negotiations.
The government's current strategy reflects its approach to manage an economy facing challenges, where consumer confidence is shaken and the risk of further downgrades to economic forecasts looms large.