Swedish budget rules: praise from Brussels, pressure at home

Public finances in Sweden remain strong by EU standards. The national rules-based framework that guides Swedish fiscal policy has contributed to this solid performance. These rules, which complement the EU rules, provide for an ambitious surplus objective for the general government (2% of GDP on average over the cycle), multi-annual nominal expenditure ceilings for central government and a balanced budget requirement for local government. The framework has been successful in promoting prudent fiscal policy, helping Sweden to comfortably comply with EU Stability and Growth Pact (SGP) requirements.

Nevertheless, despite the overall positive performance there has lately been increasing pressure in different parts of the framework.

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