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Swedish government projects 3.3 percent GDP growth in 2007

Swedish government projects 3.3 percent GDP growth in 2007

Sweden's new center-right government on Monday presented a budget proposal it hopes will kick-start new job creations, and projected the economy will grow by 3.3 percent next year and by 3.1 percent in 2008.
Finance Minister Anders Borg said the four-party coalition government has created a budget "for those who work," with lower income taxes and reduced unemployment benefits. It also included several measures to make it cheaper and easier for companies to make new hires.
The proposal said unemployment is forecast at 5.8 percent in 2007 before dropping to 5.0 percent a year later. The jobless rate was 5.7 percent in August.
Prime Minister Fredrik Reinfeldt's coalition government will slash income taxes as expected by about 40 billion kronor (euro4.3 billion; US$5.4 billion) in 2007, freeze property taxes and halve the wealth tax. The tax cuts will partly be financed by reducing unemployment and sick leave benefits.
Reinfeldt's coalition won a September election in part by accusing the sitting Social Democrats of hiding Sweden's true unemployment rate, saying about 1 million of Sweden's 9 million citizens were outside the job market, counting people on sick leave and government training programs.
Borg said the proposed budget is the first step toward bringing down what he called "mass unemployment" before the next election in 2010.
"The total unemployment should be considerably lower by the end of our mandate term," Borg said.
The opposition, however, called it a budget for the rich, and questioned how the tax cuts will be financed.
"The effect of the budget is that the rich will become richer, and the pressure will increase on those that are unemployed," said Par Nuder, who was finance minister in the Social Democratic government.
The government also hopes to make about 50 billion kronor (euro5.4 billion; US$6.7 billion) a year by selling off state assets in large companies, but did not identify which companies would go on the auction bloc.
Reinfeldt's Moderate Party has previously said it wants to review state holdings in listed companies such as telecom TeliaSonera, airline group SAS, stock exchange operator OMX and Nordea, the Nordic region's largest bank.
Reinfeldt's four-party alliance ended 12 years of Social Democratic rule, and has pledged to fine-tune rather than dismantle Sweden's cradle-to-grave welfare state.


Updated : 2021-10-22 08:23 GMT+08:00