Although Finance Minister Magdalena Anderson (S) revised the 2021 GDP forecast slightly, from previously being criticized for pessimism, the government’s forecast is now largely in line with what major banks and other analysts imagine.
The numbers and forecasts are quite reasonable. The terms and conditions are good, but from always talking about us being in a crisis and from giving a somewhat negative image in the past, it now presents a very positive image. I did this because we are approaching the elections. That’s clearly the focus, says Annika Winsth, chief economist at Nordea.
Requires wise investments
Because of good public finances, there is room for investment to the extent that Magdalena Anderson, many evaluators believe, but the question is what the government will spend the money on. The finance minister didn’t say much about it.
– It’s a very huge budget considering that we are not in the same crisis situation as it was a year ago. But whether the amount is high or not depends entirely on what is spent on that money, says Jens Magnuson, chief economist at SEB.
Magnuson notes that purely infection control and immunization measures are still necessary cost items, but to a lesser degree now than before. But in several places, for example, there is a question about the need for more support measures put in place during the crisis.
We have opportunities to make wise investments, but that is exactly it. Here I am a little concerned about how the 74 billion will be used, says Annika Winsth.
If you’re just using money as a form of electoral populism, I’m worried.
Danske Bank’s chief economist, Michael Grahn, went so far as to say he considers the space for reform to be too generous.
– If you have a very strong growth forecast, it is very difficult to pay for that in the bombshell. That’s generosity and probably about facing an election year and not what the Swedish economy needs, he says.
He points out that the challenge remains to be heard politically:
I think in general it can be very difficult given the political situation to move forward with a budget that has to be accepted. But from an economic perspective, you’re a bit generous.
“Budget Discipline Advocates”
Before the budget forecast, the National Institute for Economic Research (KI) estimated the scope of the reform at around SEK 40 billion. KI Expectations Director Yelwa Hayden Westerdahl’s spontaneous reaction was a “leap” when the higher number was presented.
– We think the economy has recovered so well that 40 billion is in balance, she says.
– I am in favor of budgetary discipline and we can go back to the framework we have so that it does not go down a slope.
When it comes to comparing Magdalena Anderson to the 2008-2009 financial crisis and the importance of having enough space, Yelwa Heden Westerdahl says:
– These measures are of a different kind. They have to keep companies under their arms, but as we see it, companies do not need this support but can manage it on their own. We estimate that we will reach a normal economic situation next year.
“Extreme tv maven. Beer fanatic. Friendly bacon fan. Communicator. Wannabe travel expert.”