Stronger central government finances and lower government debt in 2021
News 18 February 2022
The Swedish National Debt Office today submitted its basis for evaluation of debt management in 2021 to the Government. The year was dominated by an unexpectedly quick economic recovery, which contributed to a surplus in central government finances, lower borrowing requirement and a lower government debt.
The basis for evaluation report, which is submitted every year in February, describes how the Debt Office managed the central government debt and borrowing within the Government’s guidelines during the previous year. It also presents the results of an annual confidence survey and the cost of the debt. Every two years by 25 April at the latest, the Government will in turn submit an evaluation of central government debt management to the Riksdag.
The year in brief
- The Swedish economy recovered surprisingly quickly and the central government budget balance returned to a surplus in 2021. The central government debt thereby went down, after the increase in 2020
- The Riksbank's decision to repay loans previously raised by the Debt Office to finance the foreign exchange reserves also contributed to the budget surplus.
- As a consequence of the stronger government finances, borrowing requirement decreased. The Debt Office therefore gradually lowered the supply of government securities during the year.
- The Debt Office extended the government yield curve further by introducing a 50-year government bond.
- Liquidity in the government securities market deteriorated and was deemed unsatisfactory by both primary dealers and investors, according to the Debt Office’s annual survey.
- Market participants also lowered their overall assessment of the Debt Office’s strategies and actions after the increase in previous years.
- The maturity of the central government debt was kept within the overall range, and the currency exposure was kept unchanged in accordance with the Government’s guidelines.
- The cost of the central government debt was SEK 9 billion, corresponding to 0.17 per cent of GDP, and thus remained at a historically low level.
- The Debt Office position for a stronger krona showed an unrealised gain.
Report (only in Swedish): Central Government Debt Management – Basis for Evaluation 2021
More on the results of the annual confidence survey
(only in Swedish)
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