Swedish economy slows - budget prospects weaken - Seite 2

Plan for krona borrowing stands

The Debt Office borrows to finance central government budget deficits and to refinance old loans by issuing interest-bearing securities, chiefly government bonds. Even though the new forecast points to a lower budget balance, the Debt Office does not need to increase krona borrowing this time, however, since it has a cash surplus to use.

Borrowing in government bonds therefore follows the same plan as in the previous forecast. This means that the issue volume per auction is raised from SEK 1.5 billion to SEK 2 billion in 2020. Borrowing in inflation-linked bonds and T-bills is also unchanged from the previous forecast.

However, bond borrowing in foreign currency increases. This is because the Debt Office goes back to the plan of refinancing all lending to the Riksbank with foreign currency loans instead of partly using cash funds.

Central government borrowing, SEK billion
Previous forecast in parentheses	2018	2019	2020
Government bonds	32 (32)	30 (30)	40 (40)
Inflation-linked bonds	9 (9)	9 (9)	9 (9)
T-bills (outstanding stock at year-end)	20 (20)	20 (20)	40 (40)
Foreign currency bonds	88 (88)	90 (44)	56 (56)
of which on-lending to the Riksbank	88 (88)	90 (44)	56 (56)

Central government debt decreases this year and levels out in 2020

Central government debt is estimated to decrease by almost SEK 100 billion this year to SEK 1 163 billion. This corresponds to 23 per cent of GDP. Next year the debt increases slightly in kronor, but the proportion remains at the same level.