Optimism among firms

The National Institute of Economic Research (NIER) published its economic tendency survey on Tuesday. The indicator climbed 1.6 points from 110.3 in December to 111.9 in January, with the manufacturing indicator rising sharply from 115.1 to 120.8.

Swedish firms continue to be confident about the economy. Consumers are more pessimistic than usual about the economy, but are more upbeat about their personal finances.

According to Nordea, the economic tendency indicator is at its highest in over five years, and on a par with a 6% rate of growth in the economy. However, Mats Dillon, head of NIER, says the strong manufacturing indicator, which pulled up the overall indicator, should be taken with a “pinch of salt”.

Tax hikes in pipeline

New tax reforms totalling SKr 62 billion are to be expected over the next four years, reveals Dagens Industri (DI), which has taken a closer look at the long-term trend in government’s budget proposals and the expenditure ceiling.

The expenditure ceiling in the government’s autumn budget proposal reflects how many reforms the government wishes to implement and how much taxes need to be raised.

“Which means that taxes need to be raised with a corresponding amount,” says Jesper Hansson, head of forecasts at the National Institute of Economic Research, who points out another way would be to relax deficit targets. The Institute would have liked to have seen greater clarity on this.

When DI confronts Finance Minister Magdalena Andersson over what the rising expenditure ceiling really means, she does not wish to admit to plans to raise taxes, and explains that it is about “creating scope for reform if we get good jobs growth and increased tax revenues.”

At the same time the Finance Ministry is fully occupied hunting for new sources of tax revenue, and the minister talks of a new tax on financial activities, “The finance sector should be able to contribute a bit more.”