(Bloomberg) -- Sweden's Finance Minister Magdalena Andersson is fighting back at the characterization of her fiscal prudence as “insanity.”
In fact, she on Monday took to Facebook to say that it would be “insane” for anyone to think that the government is going to reduce debt by hundreds of billions of kronor over the next few years at time when debt levels are already at the lowest since the 1970s.
Such an assumption is based on a misunderstanding of the Finance Ministry's forecasts and no such plan exists, she said.
While “at first glance” it looks like surpluses are going to grow strongly in the coming years, those forecasts only include spending that has been formally decided, she said. In reality, a lot of the surpluses will be used to finance reforms and the estimates should be seen as a tool for assessing the room for future spending, she said.
It would be “insane” to pay off debt at the same time as Sweden has big investment needs when it comes to welfare, infrastructure and “everything else that is building society stronger,” she said.
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Andersson has been criticized by a range of economists for a lack of initiative and for building up unnecessary surpluses as public debt has shrunk to historically low levels. The surplus is estimated at 0.6 percent this year, far above the 0.33 percent target.
While presenting a budget last week that included tax increases, she said that any spending needs be financed “krona for krona.”
To contact the reporter on this story: Rafaela Lindeberg in Stockholm at rlindeberg@bloomberg.net
To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net, Kati Pohjanpalo
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