Sweden proposes historic budget for 2021 to restart pandemic-stricken economy

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Close-up of a Calculator and Pen on a Financial Newspaper. Blue-toned.

The Swedish government proposed on Thursday a historic budget that worth over 100 billion SEK (about 11.5 billion U.S. dollars) for 2021 to boost its economy, which is severally affected by the pandemic.

The restart package will go to welfare, investments in climate initiatives, job creation and support for the unemployed, said a government press release on Thursday.

“In order to get Sweden out of the recession as quickly as possible, a restart of the Swedish economy is needed. Therefore, we present a historic budget with proposals that total more than SEK 100 billion,” said Minister for Finance Magdalena Andersson in the press release.

“Now the government is starting to shift from a temporary crisis policy to investments to make the wheels turn in the economy and create new jobs,” Andersson explained.

The pandemic and its consequences have drastically changed the outlook for economic development in Sweden and the rest of the world. GDP is expected to fall sharply this year worldwide. At the same time, activity in the Swedish economy seems to have bottomed out in the spring and the recovery has now begun. In Sweden, GDP is expected to fall by 4.6 percent this year, according to the release.

“With strong public investment in welfare and climate change, we will get the whole of Sweden to work and advance our way out of the crisis together,” said Andersson.

Earlier this month, Statistics Sweden (SCB) said Sweden’s economy shrank by 8.6 percent in the second quarter of this year due to the COVID-19 pandemic, the largest quarterly decline in 40 years. SCB statistics also showed that Sweden’s current unemployment rate stood at 9.3 percent, the highest of the past 20 years. (1 U.S. dollar = 8.72 SEK)

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