Following Centre leader Annie Lööf’s announcement that her party could not support Stefan Löfven, it is likely that the Riksdag will adopt a budget motion put forward by the Moderate and the Christian Democratic parties that includes tax cuts of some SEK 20 billion on Wednesday.
Professor Lars Jonung of Lund University, who has nothing against tax cuts in general since they promote job creation and education, says politicians should exercise caution given the impending risk of a recession. “We have an overly expansive monetary and fiscal policy,” he comments.
SEB head economist Robert Bergqvist holds with the professor, indicating that it might be preferable to wait and see if the economy is slowing down before introducing the cuts.
Meanwhile, Ylva Hedén Westerdahl of the National Institute of Economic Research says the government agency will be writing down its forecast for the Swedish economy next week. She is of the view that the centre-left government should have saved more for an economic downturn.
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