(Adds comments from finance minister at news conference)
Sept 20 (Reuters) - Sweden's centre-right government forecast the country's key repo rate would rise to 0.5 percent by end-2010 as it unveiled on Sunday the main points of a growth-oriented budget aimed at securing re-election next year.
The rate prediction is higher than a government forecast made in April for 0.25 percent at end-2010. It also compares with a central bank forecast for rates to stay where they are for the coming year.
Following are forecasts in a budget document provided to reporters, all of which are percentages. Figures in brackets are from a previous set of budget forecasts, made in April. Repo rate forecasts are for the end of each year listed.
2009 2010 2011 2012 GDP -5.2 (-4.2) 0.6 (0.2) 3.1 (2.4) 3.8 (4.0) Unemployment 8.8 (8.9)) 11.4 (11.1) 11.6 (11.7) 10.9 (11.3) CPI -0.4 (-0.4) 0.4 (0.3) 0.8 (0.8) 1.8 (1.5) Repo rate 0.25 (0.25) 0.5 (0.25) 1.25 (0.75) 2.50 (1.75) Govt debt* 37.8 (38.7) 40.4 (41.4) 40.6 (41.3) 40.3 (40.8)
* Central government debt as percentage of GDP.
The coalition government is due to present its budget bill to parliament on Monday.
COMMENTS FROM FINANCE MINISTER ANDERS BORG:
'We have a very difficult economic situation. The economy is contracting 5 percent and unemployment is rising. In this situation you should have an expansive economic policy that is compatible with a long-term balance in the public finances.'
'We have such a clear improvement in terms of (public) income and such a good development in terms of expenditue that we can carry out quite substantial measures and still see that public finances return to balance in a reasonable time frame.'
'If we don't keep up demand and more people become unemployed than is necessary that will inflict very grave costs on society. So it is important to keep economic policy expansive in this kind of difficult situation.'
'There are very clear risks in the economy. We have worries in the Baltics and the financial system. They can head in both directions -- we may see a stronger recovery than we are forecasting and we could have a weaker one. This is a well-balanced insurance policy.'
'We are signing an insurance policy against long-term and extensive injuries to the Swedish economy from this financial crash.' Keywords: SWEDEN BUDGET/ (Stockholm Newsroom, tel: +46-8-700 1017, e-mail: stockholm.newsroom@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Sept 20 (Reuters) - Sweden's centre-right government forecast the country's key repo rate would rise to 0.5 percent by end-2010 as it unveiled on Sunday the main points of a growth-oriented budget aimed at securing re-election next year.
The rate prediction is higher than a government forecast made in April for 0.25 percent at end-2010. It also compares with a central bank forecast for rates to stay where they are for the coming year.
Following are forecasts in a budget document provided to reporters, all of which are percentages. Figures in brackets are from a previous set of budget forecasts, made in April. Repo rate forecasts are for the end of each year listed.
2009 2010 2011 2012 GDP -5.2 (-4.2) 0.6 (0.2) 3.1 (2.4) 3.8 (4.0) Unemployment 8.8 (8.9)) 11.4 (11.1) 11.6 (11.7) 10.9 (11.3) CPI -0.4 (-0.4) 0.4 (0.3) 0.8 (0.8) 1.8 (1.5) Repo rate 0.25 (0.25) 0.5 (0.25) 1.25 (0.75) 2.50 (1.75) Govt debt* 37.8 (38.7) 40.4 (41.4) 40.6 (41.3) 40.3 (40.8)
* Central government debt as percentage of GDP.
The coalition government is due to present its budget bill to parliament on Monday.
COMMENTS FROM FINANCE MINISTER ANDERS BORG:
'We have a very difficult economic situation. The economy is contracting 5 percent and unemployment is rising. In this situation you should have an expansive economic policy that is compatible with a long-term balance in the public finances.'
'We have such a clear improvement in terms of (public) income and such a good development in terms of expenditue that we can carry out quite substantial measures and still see that public finances return to balance in a reasonable time frame.'
'If we don't keep up demand and more people become unemployed than is necessary that will inflict very grave costs on society. So it is important to keep economic policy expansive in this kind of difficult situation.'
'There are very clear risks in the economy. We have worries in the Baltics and the financial system. They can head in both directions -- we may see a stronger recovery than we are forecasting and we could have a weaker one. This is a well-balanced insurance policy.'
'We are signing an insurance policy against long-term and extensive injuries to the Swedish economy from this financial crash.' Keywords: SWEDEN BUDGET/ (Stockholm Newsroom, tel: +46-8-700 1017, e-mail: stockholm.newsroom@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.