The primary borrowing requirement (all government payments except interest payments) increased by SEK 70 billion in 2003 compared with 2002. The main reason is higher expenditures, while the tax revenues increased only moderately.
Expenditure increases in 2003 were mainly due to higher pension. The pension payments rose due partly to a change in the pension system, partly to increased early retirement benefits. In addition, payments to municipalities rose, for example, owing to the ceiling on child care fees.
Tax revenues increased by a total of SEK 5 billion in 2003, primarily because of the growth in tax bases such as earned income and private consumption. However, taxes not subject to preliminary charges, such as the capital gains tax and final settlement on corporate taxes, fell by SEK 15 billion. The capital gains have decreased substantially since the the stock price bubble burst in 2000, when the tax on capital gains generated SEK 25 billion more than in 2003. In addition, there was no extraordinary transfer from the Riksbank in 2003, which lowered revenues by 20 billion compared with 2002.
Interest payments on the central government debt were SEK 42 billion in 2003, which is 23 billion less than the year before. The decrease is mainly due to lower interest payments on krona denominated debt. Premiums on prices of newly issued bonds were considerably higher in 2003 than in 2002, since the Debt Office issued bonds with higher coupon rates. Lower interest rates both in Sweden and in foreign markets also contributed to lower interest payments.
The central government debt
At the end of 2003, the central government debt was SEK 1,229 billion. This is SEK 25 billion higher than a year earlier. As a percentage of GDP, central government debt was approximately 51 percent. Foreign currency denominated debt decreased by SEK 45 billion in 2003, of which 18 billion is explained by the appreciation of the krona exchange rate. The remainder of the decrease is explained by amortization of foreign currency debt
The borrowing requirement in December
The Swedish central government cash flow in December resulted in a borrowing requirement of SEK 23.3 billion, which is SEK 1.6 billion more than projected. The primary borrowing requirement was SEK 13.3 billion, which is 1.1 billion less than expected. Net payments to tax accounts were about SEK 4.5 billion less than expected, mainly due to smaller supplementary payments of tax and less value added tax. The Debt Office's net lending was 4.9 billion lower than projected. This is mainly due to unexpected loan repayments from state enterprises.
Interest payments on the central government debt in December were SEK 2.7 billion higher than expected. This is explained by lower premiums on prices of newly issued bonds and higher interest payments in foreign currency debt.
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 2004 will be published on February 25, 2004, at 9.30 a.m.
For further information:
Lars Hörngren, tel: +46 8 613 47 36
Gunnar Forsling, tel: +46 8 613 47 84
See press release with tables on www.rgk.se
