Swedish budget sets out tax cuts as defense spending ramps up. On Wednesday, Sweden’s 2024 budget pledged 39 billion crowns ($3.5 billion) in tax savings and more money for welfare, defense, and the criminal justice system but stressed spending had to be controlled to control inflation.
Since entering power last year, the right-of-center coalition has faced domestic and international obstacles.
Inflation and interest rates have hurt people and slowed the economy, while Russia’s invasion of Ukraine has forced Sweden to join NATO and fortify its defenses.
“The economic policy supports households and welfare while making historic investments in the judicial system and defense,” said Finance Minister Elisabeth Svantesson.
Many people have mortgage payments three times greater than in 2022 after years of robust growth and wealth. Home and business real estate prices have plummeted.
Investors panicked as the Swedish crown fell to its lowest level against the euro.
The government would increase in-work tax credits and lower gasoline charges to help people most hit by inflation and interest rates.
Local governments will receive 16 billion crowns ($1.43 billion) to continue welfare programs, while retirees will pay lesser taxes.
“If the recession deepens, Swedish finances are strong so that we can act,” Svantesson added.
The administration also increased internal and foreign security funding.
In Sweden, gang violence has increased, and uncertainty over NATO entrance and Muslim outrage over Koran burnings has led the security agency to boost its threat assessment to the second-highest stage, signifying a “high level” of danger of an attack.
Sweden will spend more on defense next year to reach NATO’s 2% GDP target, according to Svantesson. The administration has predicted a 27 billion Swedish crown increase in 2024. Police and criminal justice receive a boost.
