Sweden Announces Further Stimulus In 2010 Budget To Aid Recovery

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Sweden's Finance Minister Anders Borg, while announcing the latest budget on Sunday, said additional stimulus measures would be put in place for the next two years to aid the country's early economic recovery.

The Swedish government, which is to face re-election next year, is planing to pump in an additional SEK 32 billion next year and SEK 24 billion in 2011 into new measures to tackle the recession. In line with the increased government spending, the general government deficit is projected to rise to 3.4% of GDP next year from an estimated 2.2% this year. Thereafter, deficit is expected to shrink to 2.1% in 2011 and 1.1% in 2012.

The budget also aims at reducing unemployment, which is expected to surge to 11.6% in 2011 from 8.8% this year, before starting to decline. The government, meanwhile, still expects the economy to contract 5.2% this year, the weakest performance in a single year since the second world war. The economy is forecast to return to growth with 0.6% expansion next year and 3.1% growth in 2011.

(Market News Provided by RTTNews)