By Johan Sennero and Niklas Pollard
STOCKHOLM, Sept 20 (Reuters) - Sweden's centre-right government announced on Sunday a raft of extra spending measures for 2010 as it unveiled the main points of a growth-oriented budget aimed at securing re-election next year.
The government stuck to its most recent forecasts for the economy, predicting a 5.2 percent contraction this year before modest growth next year and a more robust 3.1 percent expansion in 2011.
'The financial policy should stay expansive but sustainability in the long run in public finances will be secured,' the government said in a budget document provided to reporters.
The budget for next year will include 31.85 billion Swedish crowns ($4.6 billion) in unfinanced spending and some 46 billion crowns of spending in the following two years.
Finance Minister Anders Borg said there was a chance the recovery could be stronger than currently forecast.
'Recently there have been signs that the Swedish and the global recovery may be faster and stronger than what is assumed in the main scenario,' Borg said in the budget document.
But he also identified a key danger for Sweden's economy: the Baltic region, where Swedish banks have advanced billions of euros worth of loans and face massive defaults as the economy there suffers a huge contraction.
'The Baltics are the gravest risk,' he told a news conference.
The government predicted the central bank's key repo rate would end next year at 0.5 percent, higher than a government forecast made in April for 0.25 percent. That also compares with a central bank forecast for rates to stay unchanged in the coming year.
The coalition government is due to present its budget bill to parliament on Monday.
(Editing by Greg Mahlich) ($1=6.899 Swedish Crown) 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.
STOCKHOLM, Sept 20 (Reuters) - Sweden's centre-right government announced on Sunday a raft of extra spending measures for 2010 as it unveiled the main points of a growth-oriented budget aimed at securing re-election next year.
The government stuck to its most recent forecasts for the economy, predicting a 5.2 percent contraction this year before modest growth next year and a more robust 3.1 percent expansion in 2011.
'The financial policy should stay expansive but sustainability in the long run in public finances will be secured,' the government said in a budget document provided to reporters.
The budget for next year will include 31.85 billion Swedish crowns ($4.6 billion) in unfinanced spending and some 46 billion crowns of spending in the following two years.
Finance Minister Anders Borg said there was a chance the recovery could be stronger than currently forecast.
'Recently there have been signs that the Swedish and the global recovery may be faster and stronger than what is assumed in the main scenario,' Borg said in the budget document.
But he also identified a key danger for Sweden's economy: the Baltic region, where Swedish banks have advanced billions of euros worth of loans and face massive defaults as the economy there suffers a huge contraction.
'The Baltics are the gravest risk,' he told a news conference.
The government predicted the central bank's key repo rate would end next year at 0.5 percent, higher than a government forecast made in April for 0.25 percent. That also compares with a central bank forecast for rates to stay unchanged in the coming year.
The coalition government is due to present its budget bill to parliament on Monday.
(Editing by Greg Mahlich) ($1=6.899 Swedish Crown) 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.
© 2009 AFX News
