Sweden's 2024 budget highlights sluggish economy

The Swedish government's 2024 budget, unveiled on Wednesday, aims to combat high inflation, bolster defense, and improve the judicial system, reported Xinhua.

"With the highest inflation in 30 years, a recession and a difficult security environment, Sweden is facing a challenging situation," the Ministry of Finance said.

The proposed expenditure under the new budget amounts to 1,331 billion kronor (120 billion U.S. dollars). Meanwhile, the proposed reforms, which total 39 billion kronor, "aim to address Sweden's most acute problems," the ministry said.

"It is important that the budget doesn't drive inflation," Minister for Finance Elisabeth Svantesson told journalists at the presentation of the budget proposal.

Inflation in August stood at 7.5 percent year-on-year, official statistics showed. To prevent excessive price hikes, the budget introduces measures such as a reduction in taxes on petrol, diesel, and agricultural diesel.

It also includes measures to support financially vulnerable families with children, by extending the increased housing allowance for an additional six months. Funding will also be allocated to the local government sector to alleviate the impacts of inflation.

In an effort to foster long-term economic growth, the government intends to reduce the administrative burden on businesses. It will also introduce measures to enhance electricity supply, including offering credit guarantees for new nuclear power projects.

Meanwhile, extensive investments in the defense and judicial systems have been proposed, in response to a deteriorating security environment and a high level of crime.

The country's gross domestic product is expected to shrink by 0.8 percent this year, and grow by 1 percent in 2024. Unemployment is expected to rise from 7.6 percent this year, and peak at 8.3 percent in 2025, according to the ministry's forecast.