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FINANCE

Sweden lowers budget surplus forecast

The National Debt Office (Riksgälden) lowered its estimate of Sweden’s 2008 budget surplus by 12.9 percent to 101 billion kronor ($16.2 billion).

“The Swedish economy continues to be strong although it has weakened since our forecast in October,” said the agency in a statement.

The agency sees the surplus shrinking further to 60 billion kronor in 2009, due mainly to falling corporate profits and lower capital gains resulting from the weakening global economy.

The projected surpluses include an estimated 50 billion kronor per year in income from the privatization of state assets.

Sweden recorded a surplus of 103 billion kronor for 2007, including 18 billion kronor in privatization income.

The Debt Office also projects government debt will drop to 1.07 billion kronor in 2008, and to 1.01 billion by the end of 2009.

If the forecasts hold, the additional reduction in Sweden’s public debt represent a 26 percent drop in the last decade.

Combined with Sweden’s expanding GDP, the figures correspond to public debt ratios of 33 percent and 30 percent of GDP, levels not seen in Sweden since the 1970s.

The debt to GDP ratio for 2007 was 38 percent.

The agency also said it plans to raise more debt by increasing the volume of government bonds from 1.5 billion kronor to 2.5 billion kronor starting in March of this year.

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ECONOMY

Swiss central bank announces big rate hike in inflation fight

The Swiss National Bank (SNB) raises the key interest rate by 0.75 percentage points, putting it back in positive territory at 0.5 percent.

Swiss central bank announces big rate hike in inflation fight

“The rate change applies from tomorrow, September 23rd 2022”, SNB said in a press release on Thursday.

It added that “inflation [in Switzerland] rose to 3.5 percent in August and is likely to remain at an elevated level for the time being”.

The latest rise in inflation is principally due to higher prices for goods, especially energy and food, according to the bank.

The SNB’s forecast for the evolution of inflation is, however, positive.

It forecasts that the rate will drop to 2.4 percent in 2023 and and 1.7 percent for 2024.

“Without today’s SNB policy rate increase, the inflation forecast would be significantly higher”, the bank said.

In mid-June, the SNB tightened interest rates by half a percentage point for the first time in 15  years. Since then, inflation in Switzerland has continued to rise. For August 2022, the statisticians reported inflation of 3.5 percent, after 3.4 percent in June and July.

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