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Riksgälden The Debt Office's new forecast for 2008 is a budget surplus of SEK 163 billion. This is SEK 62 billion more than in our previous forecast and the largest budget surplus ever. This change is mainly because we now estimate income from sale of state-owned assets at SEK 36 billion more since Vasakronan will probably be sold this year. Accordingly, the state's income from sales will be SEK 86 billion in 2008. Furthermore, higher tax income and lower social insurance expenditure contribute to the larger surplus.
Lower surplus in 2009 According to our forecast, the surplus will decrease to SEK 83 billion in 2009, when the effects of the ongoing economic slowdown will start to show. We estimate that the growth rate for GDP will be around 2 per cent in both 2008 and 2009, which is considerably lower than in recent years.
Compared with our previous forecast, the surplus is SEK 23 billion higher. The foremost reason is a reduction of social insurance expenditure of SEK 13 billion, which is mainly due to changed rules in the health insurance scheme. Tax income will increase by SEK 9 billion and interest on the central government debt will be lower.
The central government debt falls to SEK 1,016 billion at the end of 2008 and SEK 933 billion in 2009. This is equivalent to 32 and 28 per cent of GDP respectively, the lowest percentages for 30 years.
Reduced funding Nominal government bond issues decrease from SEK 2.5 billion to SEK 2 billion per auction from 13 August. Income from sales of state-owned companies will be managed in the money market in kronor and foreign currency. They will therefore not affect the issues of nominal bonds.
There will be a sharp reduction in borrowing in T-bills although we expect to have a T-bill stock of around SEK 100 billion. Inflation-linked borrowing will be unchanged at an annual pace of SEK 3 billion. Borrowing in foreign currency is expected to be SEK 4 billion and SEK 45 billion respectively during 2008 and 2009. Bond borrowing in foreign currency will be limited. The share of foreign currency debt is now 14 per cent. Consequently, we are moving over to share control: we borrow the amount in foreign currency required to keep the percentage of foreign currency debt around 15 per cent.
