The Swedish National Debt Office has not analysed the outcome in detail, but it can be noted that the primary surplus was SEK 66 billion, which was 52 billion less than in 2001. Expenditure increases in 2002 were chiefly for pensions and health insurance. Other social security payments also increased. In addition payments to municipalities rose, for example, owing to the ceiling on child care fees. Several public authorities also increased their expenditures during the year, for example, the Swedish Armed Forces, the National Police Board and the Swedish National Road Administration.
Tax revenues in 2002 declined by a total of SEK 3.5 billion, despite the growth in such tax bases as earned income and private consumption. This decline was due in part to the lowering of the income tax. Furthermore taxes not subject to preliminary charges, such as the capital gains tax and final settlement of corporate taxes, fell by 16 billion. Payments from maturing mortgage bonds fell by 37 billion in 2002. On the other hand, there was an extraordinary transfer from Sveriges Riksbank of SEK 20 billion.
Interest payments on the central government debt continued to decrease. In 2002, they totalled SEK 65 billion, 16 billion less than in the previous year. One reason is that the central government debt has fallen for a number of years in succession; another reason is the lower interest rate level. In addition, exchange rate losses were lower, owing in part to the strengthening of the krona.
Marginal Increase in the Central Government Debt
At the end of 2002, the central government debt amounted to SEK 1,160 billion, which is equivalent to approximately 50 per cent of GNP. This means that the debt increased by 3.5 billion in 2002. Large gross changes underlie this figure. On one hand, the debt increased at mid-year by nearly 40 billion when certain public authorities' deposits with the Debt Office, that are not included in the central government debt, were converted to government bonds. On the other hand, the value of the foreign currency debt fell by approximately SEK 20 billion as a result of the krona's rise in value in relation to other currencies during the year. The favourable impact of the krona's strengthening was thus offset by a technical adjustment in the accounting.
The Borrowing Requirement in December
Central government payments in December resulted in a borrowing requirement of SEK 37.8 billion, which was 13.4 billion more than the Debt Office's most recent forecast. Net payments to tax accounts were about 4 billion less than expected, primarily owing to smaller supplementary payments of tax. In addition, payments by a number of public authorities were larger than expected. The central government's net lending was more than SEK 3 billion greater than estimated. This increase can mainly be explained by public authorities, which invest in regular government securities, withdrawing funds from their cash accounts with the Debt Office to make additional investments in government securities. These transactions affect the borrowing requirement and the central government debt as reported by the Debt Office, but not the consolidated debt, which takes into account the public authorities' holdings of government securities. Interest payments on the central government debt were almost 1 billion greater than expected.
The outcome of central government borrowing requirement for January will be published on February 6, 2003, at 9.30 a.m. A revised forecast for 2003 will be published on February 19, 2003, at 9.30 a.m.
For additional information, please contact:
For additional information, please contact:
Lars Hörngren, Chief Economist, tel.+46 8 613 47 36
Peter Lundkvist, Senior Economist, tel. +46 8 613 47 84.
Attachment to press release with tables on www.rgk.se