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Riksgälden: Unexpectedly large tax payments lead to balanced budget in 2016

Increased tax income paves the way for a balanced central government budget in
2016 and a smaller deficit than previously estimated in 2017, according to a
new forecast by the Swedish National Debt Office. The improved budget balance
means that government borrowing in foreign-currency bonds and T-bills
decreases. Borrowing in government bonds remains unchanged.

- The increase in tax income is partly driven by continued strong growth in
the Swedish economy, but the unusually large tax payments in the past few
months are mainly of a temporary nature. The aggregated effect ahead is
therefore somewhat uncertain, says Director General Hans Lindblad.

The Debt Office's new forecast points to a central government budget surplus
of SEK 3 billion in 2016 and a deficit of SEK 31 billion in 2017. In the
previous forecast from October, the Debt Office expected a deficit of SEK 33
billion in 2016 and SEK 47 billion in 2017.

Tax income in 2016 is revised upwards by SEK 29 billion. Part of the revision
is explained by increased income from payroll taxes, current corporate tax
and tax on capital gains, but the main explanation is large one-time payments
of preliminary corporate tax. Also, some payments have probably been made as
pure placements of liquid funds in tax accounts. In 2017, tax income is
expected to grow at a slower pace.

On the expenditure side of the budget, the Debt Office reduces the forecast
for migration expenditure for both years. This reduction, however, is
countered by an increase in development-assistance expenditure of almost the
same size.

The Debt Office estimates Swedish GDP growth at 3.3 per cent this year and 2.5
per cent in 2017, an increase by 0.5 and 0.1 percentage points, respectively,
from the previous forecast. Domestic demand continues to boost growth.

Central government debt is estimated at SEK 1,422 billion at the end of 2016
and 1,444 billion at the end of 2017. This corresponds to 33 per cent of GDP
for both years.

| Net borrowing requirement and central government debt (SEK billion) |
| Previous forecast in parentheses 2015 2016 2017 |
| Net borrowing requirement (budget balance with opposite sign) 33 -3 (33) 31 (47) |
| Central government debt 1,403 1,422 1,444 |
| Central government debt as percentage of GDP 34 33 33 |
| Central government debt as percentage of GDP including on-lending and 28 27 27 |
|money-market assets |

Decreased foreign-currency borrowing, unchanged volume in government bondsThe smaller borrowing requirement means that borrowing in foreign-currency
bonds and T-bills is reduced.

The planned issue volume in government bonds remains at SEK 88 billion per
year in 2016 and 2017. Borrowing in inflation-linked bonds is also unchanged.

| Borrowing (SEK billion) |
| Previous forecast in parentheses 2015 2016 2017 |
| Government bonds 86 88 (88) 88 (88) |
| Inflation-linked bonds 17 18 (18) 18 (18) |
| T-bills 141 120 (135) 130 (135) |
| Foreign-currency bonds 91 60 (92) 67 (75) |
| * of which on-lending to the Riksbank 53 60 (70) 67 (55) |
ContactThomas Olofsson, Head of Debt Management, +46 (0)8 613 47 82

Linda Rudberg, Press Officer, +46 (0)8 613 45 38

Central government borrowing – forecast and analysis 2016:1


This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Riksgälden via Globenewswire


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