By Sweden’s National Debt Office recently announced that it expects a budget deficit for both this year and next year, marking a shift from three consecutive years of a budget surplus. As a result, the NDO has raised its nominal government bond issuance targets for both years, reflecting the need for increased borrowing.
Budget Deficit Projections
In 2024, the NDO anticipates a budget deficit of 84 billion Swedish kronor ($8.11 billion), following a deficit of SEK49 billion reported in October. Looking ahead to 2025, the projected budget deficit is SEK50 billion, a revision from the previous forecast of a SEK60 billion deficit.
Increased Bond Issuance Targets
To accommodate the higher borrowing requirements, the NDO has adjusted its government bond issuance targets. For 2024, the issuance target has been raised to SEK73 billion from SEK60 billion, while for 2025, it has been increased to SEK80 billion from SEK60 billion. However, the issuance target for inflation-linked bonds remains unchanged at SEK9 billion for both years.
As Sweden’s fiscal landscape undergoes changes, the National Debt Office is prepared to navigate the evolving economic conditions through strategic financial planning.
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