Sweden announced plans on Wednesday to invest an additional 85.5 billion crowns ($13 billion) in infrastructure projects over the coming decade as it looks to boost long-term growth.
The centre-right government said the investment planned for the years 2014 to 2025 would include a high-speed train line between Stockholm and the city of Linkoping, 200 kilometres to the west.
“Sweden’s main lines date to the middle of the 19th century and clearly Sweden is very different now,” Prime Minister Fredrik Reinfeldt said a press conference.
“The Sweden of today has a greater need to bind different parts of the country together, enable people to commute to work and create the conditions for industry to be competitive,” he said.
Unlike many countries in Europe, Sweden’s government finances are in robust shape, allowing it to consider extra spending. Borrowing is set to drop below 30 percent of output over the next few years.
The four-party ruling Alliance, which will announce its budget for 2013 late next month, has already said it will loosen the purse strings to offset a slowdown in the economy.
The government is looking at spending measures and tax cuts totalling 23 billion crowns ($3.48 billion) in the budget, double this year’s level, and 27 billion crowns in the 2014 finance bill.
The 2013 budget will focus on infrastructure spending, research and an improved investment climate. The government has also said it wants to cut the level of corporate tax.
Although Sweden has weathered the euro zone debt crisis well so far, the economy is expected to slow in the second half of this year and to remain relatively sluggish in 2013.
The central bank is widely expected to cut rates before the end of the year to give output a boost.
The government publishes its budget on Sept. 20. ($1 = 6.5931 Swedish crowns)
Source: (Reporting by Love Liman; Editing by Toby Chopra), Reuters