The Swedish government announced on Monday (September 22, 2025) its ambitious 2026 budget, a substantial injection of approximately 80 billion crowns ($8.50 billion) into the national economy. The ruling right-wing coalition hopes this financial boost will accelerate sluggish economic growth, particularly as the nation gears up for a general election next September.
In a statement accompanying the Budget Bill presented to Parliament, the government emphasized its commitment to its citizens. “The robust health of Sweden’s state finances is being strategically deployed to put more money directly into the pockets of hard-working individuals,” they stated. “Our aim is to bolster confidence in the future and decisively overcome the current economic recession.”
This comprehensive spending package, the most expansive since the COVID-19 pandemic, includes key measures such as broad tax cuts for employees, retirees, and businesses, a reduction in VAT on food, and a notable increase in defence spending. While many of these initiatives had been previously hinted at, their formal inclusion underscores the government’s pre-election strategy.
Beyond the headline figures, the 2026 budget allocates additional funds to crucial public services, including education, healthcare, and civil defence. It also addresses social welfare by providing increased housing allowances for low-income households.
Sweden’s economy, much like those across the European Union, has faced a period of subdued performance. Households and businesses have grappled with uncertainty stemming from a global trade war and the lingering effects of a significant inflationary surge that saw prices climb over 10%.
In contrast to several European nations, such as France, which are wrestling with the difficult task of reining in spending and debt amidst various economic headwinds, Sweden enjoys a comfortable fiscal position. Its government debt stands at approximately 32% of its Gross Domestic Product (GDP), a stark difference when compared to the European average of around 90%.
Despite significant new commitments, including allocating 3.5% of GDP to defence and securing around 220 billion crowns in loans for upcoming nuclear power plant projects, Sweden’s national debt is projected to remain comfortably below 35% of GDP. (Conversion rate: $1 USD ≈ 9.42 Swedish crowns).