Why Sweden ran an unexpected 19.8 billion kronor surplus in August
Sweden ran an unexpected surplus in August, defying expectations by more than 45 billion kronor ($5 billion).
Sweden's Debt Office (Riksgälden), the central government financial manager, had predicted in its last forecast back in May that central government payments would result in a deficit of 26.7 billion in the month of August.
A monthly deficit was reported in both June and July, although far less than expected.
But instead, the country ran a surplus of 19.8 billion kronor in August.
The Debt Office highlighted two main reasons behind the unexpected surplus:
For one thing, tax income was roughly 12 billion kronor higher than estimated, thanks to Sweden's overall economic development being better than expected, despite the country being hit hard by the pandemic.
The second reason was that fewer companies than expected had availed themselves of government support schemes for businesses affected by the pandemic. It is still not known exactly why this is the case, whether the process to apply for support was too complicated or whether businesses managed without the extra aid.
"The Debt Office had calculated that the payments for the turnover loss support to companies would amount to 13 billion kronor in August. The outcome was significantly lower, just under 1 billion kronor," said the Debt Office.
"Payments for short-term work allowance were 5 billion kronor lower than calculated and payments of local government grants 5 billion lower than estimated."
However, it also pointed out that extra grants to local governments were paid out in July rather than August, which led to some of the money in the forecast being redistributed between months.
For the whole year up to the end of August, Sweden's central government payments resulted in a deficit of 131 billion. Its central government debt stood at 1,180 billion kronor at the end of August.
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Sweden's Debt Office (Riksgälden), the central government financial manager, had predicted in its last forecast back in May that central government payments would result in a deficit of 26.7 billion in the month of August.
A monthly deficit was reported in both June and July, although far less than expected.
But instead, the country ran a surplus of 19.8 billion kronor in August.
The Debt Office highlighted two main reasons behind the unexpected surplus:
For one thing, tax income was roughly 12 billion kronor higher than estimated, thanks to Sweden's overall economic development being better than expected, despite the country being hit hard by the pandemic.
The second reason was that fewer companies than expected had availed themselves of government support schemes for businesses affected by the pandemic. It is still not known exactly why this is the case, whether the process to apply for support was too complicated or whether businesses managed without the extra aid.
"The Debt Office had calculated that the payments for the turnover loss support to companies would amount to 13 billion kronor in August. The outcome was significantly lower, just under 1 billion kronor," said the Debt Office.
"Payments for short-term work allowance were 5 billion kronor lower than calculated and payments of local government grants 5 billion lower than estimated."
However, it also pointed out that extra grants to local governments were paid out in July rather than August, which led to some of the money in the forecast being redistributed between months.
For the whole year up to the end of August, Sweden's central government payments resulted in a deficit of 131 billion. Its central government debt stood at 1,180 billion kronor at the end of August.
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