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Excessive Deficit Procedure 2020

General government finance deficit at SEK 152 billion in 2020

Statistical news from Statistics Sweden 2021-03-31 9.30

In 2020, general government net lending/net borrowing amounted to a deficit of SEK 152 billion and the consolidated gross debt amounted to SEK 1 974 billion. The size of the deficit in relation to GDP means that Sweden did not meet the EU convergence requirements. Compared with 2019, general government finances were weakened by SEK 182 billion.

The COVID-19 pandemic had a significant impact on the general government finances of 2020. The general government finance deficit corresponded to 3.1 percent of GDP, compared to a surplus of 0.6 percent in 2019. The vast majority of COVID-19-related support has been financed by the central government, leading to a central government deficit of SEK 156 billion, compared to a surplus of SEK 69 billion in 2019. A large portion of the support consisted of grants to local government, which consequently reported a surplus of SEK 14 billion in 2020. Social security funds reported a deficit of SEK 10 billion in 2020, mainly due to lower dividends.

General government gross debt increased

General government consolidated gross debt increased by SEK 213 billion between 2019 and 2020. In the same period, GDP in current prices decreased by SEK 74 billion. Therefore, the debt in relation to GDP increased from 35.0 percent in 2019 to 39.9 percent in 2020.

Central government debt increased by SEK 176 billion, local government debt increased by SEK 37 billion and social security fund debt increased by SEK 2 billion. Central government consolidated gross debt in relation to GDP amounted to 27.7 percent at the end of 2020.

EU convergence requirements

According to the EU convergence requirements, the government deficit must not be more than 3 percent of GDP and gross debt must not exceed 60 percent in relation to GDP. In 2020, Sweden failed to meet these criteria. However, due to the risk of severe economic impact brought on by the COVID-19 pandemic, a general escape clause to the Stability and Growth Pact has been activated. This exception entails that the deadline by which a Member State is to have undertaken corrective measures to realign to the criteria, typically a year, can be extended.
Compared to the publication of EDP in September 2020, net lending/borrowing has been revised for the years from 2017-2019.

The calculations for the Excessive Deficit Procedure are submitted by Statistics Sweden to Eurostat in accordance with the EU Stability and Growth Pact under Council Regulation (EC) No 479/2009, as amended by No 679/2010 and Commission Regulation (EU) No 220/2014. The figures reported will be audited by Eurostat and may be revised during this process. In this event, revised estimates will be published on April 22 by both Statistics Sweden and Eurostat.

More information about the Excessive Deficit Procedure, as well as government finances in general, is available on Eurostat’s website Government finance statistics (Eurostat).

Comparison with ordinary financial accounts

Calculations of convergence requirements are somewhat different from the ordinary compilations in the financial accounts. For example, the gross debt is calculated at a nominal value, because this value must be paid on maturity. In the financial accounts valuation, gross debt is calculated at market value. The gross debt comprises only certain financial instruments, such as currency, deposits, debt securities and loans. The financial accounts also comprise equity and investment fund shares or units, other accounts receivable/payable, financial derivatives and occupational pensions.

Government net lending and borrowing and gross debt according to the EU convergence criteria
SEK billions 2017 2018 2019 2020
GDP 4 625.1 4 828.3 5 025.1 4 951.6
Net lending/borrowing 65.8 39.6 29.7 ‑151.9
Percentage of GDP (%) 1.4 0.8 0.6 ‑3.1
Gross debt 1 883.8 1 878.6 1 760.9 1 974.1
Percentage of GDP (%) 40.7 38.9 35.0 39.9

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On 2021-09-30 at 09:30.

Feel free to use the facts from this statistical news but remember to state Source: Statistics Sweden.

Statistical agency and producer

Statistics Sweden, National Accounts

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Jessica Engdahl

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