as strong as Pippi Longstocking! It was during a stockholm visit a few years ago that the OECD boss Angel Gurría made this analogy in a speech on the Swedish economy.
When he on Friday was a return visit, he had a more nuanced message. Blågul economy is moving towards a slowdown. According to the OECD’s new Sverigerapport growth forecast of 1.6 per cent in the year.
The calculation is just a bit higher than other forecasters’. National institute of economic research announced this week its tillväxtbedömning: 1.5 per cent. The international monetary fund says the 1.2 per cent in its latest forecast. The national financial management authority, ESV, end up a decimal place higher.
agree on the public finances, despite the economy’s slowdown, will be strong.
The Swedish state’s net worth is now positive. The value of the assets – including state-owned companies – is then in 2018, higher than the national debt. And according to the ESV, the debt will shrink further in the future. Already in the year is expected to fall to 33.4 percent of GDP.
Good news. But here arises a luxury problem. From this year, we have dual targets. The first: the surplus should be one-third of a percent. Secondly, the national debt is anchored around 35 percent of GDP. The target thus has a built-in contradiction. It requires that the liability is both shrinking and is stable.
said on Friday that fears of a too low debt is opåkallad. The government’s tax cuts and expenditure reforms will solve the problem.
It’s probably true. It is also fairly uncontroversial. A part of the calculations that show a furious american public debt based on that the government is moving with excessively large budget surplus. There is no one who believe. But the question still arises as to which of the two new rules of the budget who shall prevail when debt now bobs close to the target level of 35%.
What should Alice do with all the gold when kappsäcken is already full? Put the bunny on them? Continue to save?
the OECD is advocating that the eurozone countries like Germany and the Netherlands releasing a bit on the harsh discipline. They themselves, and the whole of Europe’s economy, would be better for it. Gurría dared not, however, give Sweden some advice in the matter.
A tip is that it becomes a political battle between the government and the opposition. Vårbudgeten, landing soon, learn to be a first battle.
