A central government surplus this year turns into deficit next year - excess deposits in tax accounts are the main driver this year
(Thomson Reuters ONE) -
A central government surplus of SEK 80 billion 2016 turns into a deficit of SEK
33 billion 2017, according to the latest forecast from the Swedish National Debt
Office. The main driver behind the surplus is excess deposits in tax accounts.
As the budget balance for 2016 and 2017 is now revised by SEK 48 billion, the
total borrowing requirement is lower than in the previous forecast. Therefore
the Debt Office is reducing the issue volumes of all types of government
securities. This means that borrowing in government bonds will be SEK 81 billion
this year and SEK 66 billion next year.
-The deposits in the tax account will complicate the interpretation of the
central government finances. The reported central government debt will be lower
than it actually is, as the balance of the tax account in practice constitutes a
debt of the state, says Director General Hans Lindblad.
Excess deposits in the tax accounts are an expensive way of borrowing for the
state. The additional cost is estimated at approximately SEK 500 million for
2016, compared with the Debt Office''s regular borrowing.
The Debt Office''s forecast points to a GDP growth of 3.3 percent this year, 1.9
percent next year and 1.8 percent 2018. The global recovery is continuing slowly
and swedish growth is driven by domestic demand.
Changes compared to previous forecast
The budget surplus for 2016 is just under SEK 40 billion larger than the Debt
Office''s previous forecast in June. This is mainly due to an increase in
payments to the tax account, but also to lower costs.
The budget deficit for 2017 is SEK10 billion lower than in the previous
forecast. This is mainly due to tax revenues increasing by SEK 5 billion, mainly
explained by higher revenue from consumption-based taxes and slightly higher
provisional tax payments from companies.
+------------------------------------------------------------------------------+
|Net borrowing requirement and central government debt (SEK billion) |
+------------------------------------------------------+---------+-------+-----+
|Previous forecast in parentheses | 2016| 2017| 2018|
+------------------------------------------------------+---------+-------+-----+
|Net borrowing requirement (budget balance with | | | |
|opposite sign) |-80 (-41)|33 (42)| -20|
+------------------------------------------------------+---------+-------+-----+
|Central government debt | 1 350| 1 372|1 342|
+------------------------------------------------------+---------+-------+-----+
|Central government debt as % of GDP | 31| 30| 28|
+------------------------------------------------------+---------+-------+-----+
Government debt is estimated at SEK 1350 billion at the end of 2016, SEK 1 372
billion in 2017 and SEK 1 342 billion in 2018. This corresponds to 28 percent of
GDP at the end of 2018(.)
Lower issue volume in government bonds
Due to lower net borrowing requirement and lower refinancing requirement the
Debt Office reduces the auction volumes in government bonds from SEK 3.5 billion
to SEK 3.0 billion during the forecast period. This means that borrowing in
government bonds will be SEK 81 billion this year and SEK 66 billion in 2017.
Borrowing in T-bills is reduced to SEK 10 billion per auction. Also borrowing in
inflation-linked bonds will be decreased.
+----------------------------------------------------------------------+
| Borrowing (SEK billion) |
+----------------------------------------+----------+-----------+------+
| Previous forecast in parentheses | 2016 | 2017 | 2018 |
+----------------------------------------+----------+-----------+------+
| Government bonds | 81 (83) | 66 (77) | 66 |
+----------------------------------------+----------+-----------+------+
| Inflation-linked bonds | 16 (18) | 14 (18) | 14 |
+----------------------------------------+----------+-----------+------+
| T-bills | 90 (120) | 110 (130) | 80 |
+----------------------------------------+----------+-----------+------+
| Foreign-currency bonds | 60 (59) | 67 (66) | 105 |
+----------------------------------------+----------+-----------+------+
| - of which on-lending to the Riksbank | 60 (59) | 67 (66) | 105 |
+----------------------------------------+----------+-----------+------+
Contact
Robert Sennerdal, press officer, +46 8 613 46 94
Central Government Borrowing 2016_3:
http://hugin.info/133745/R/2051540/767618.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Riksgälden via GlobeNewswire
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Datum: 26.10.2016 - 03:30 Uhr
Sprache: Deutsch
News-ID 1465918
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