National Debt

Sweden's National Debt Is Increasing – but Still Historically Low

Sweden's national debt has once again become a hot topic as the Riksbank today, June 1, 2025, presented the latest figures. The debt now amounts to 1,171 billion SEK, which corresponds to 19.57 percent of Sweden's GDP. Despite the recent increase, the debt remains at a relatively low level internationally – and well below the levels seen historically.

The National Debt in Retrospect – From 70 Percent to Under 20

To put today's figures into perspective, it’s worth looking back. During the 1990s crisis, the national debt soared and exceeded 70 percent of GDP in 1996. Since then, Sweden has managed to reduce the debt ratio through deliberate fiscal discipline and economic growth. Just ten years ago, the debt was over 30 percent of GDP, and as recently as 2018, the figure was 24.76 percent.

The recent increase – from 16.86 percent of GDP in summer 2023 to today's 19.57 percent – stands out. In just one year, the national debt has risen by over 160 billion SEK. But why is this increase happening now?

Why Is the National Debt Increasing?

According to the Swedish National Debt Office (Riksgälden) and the Riksbank, the rise is due to several factors. After three years of budget surpluses, the government now has a deficit, partly due to dampened tax revenues, increased expenditures, and a capital injection to the Riksbank of 40 billion SEK. Forecasts indicate a deficit of 84 billion SEK in 2024 and 50 billion SEK in 2025.

Riksgälden Director Karolina Ekholm explains in a press release:

The public finances have recovered strongly after the pandemic, but we now see a weakening ahead, with dampened tax revenues and higher expenditures for the state.

At the same time, Riksgälden anticipates that the Swedish economy will grow by 0.5 percent this year, and that the labor market will strengthen next year, which could slow the debt increase in the long term.

What Does the National Debt Mean for You?

The national debt is more than just a number for economists – it actually affects your everyday life. When the debt increases, the government needs to borrow more money. This leads to higher interest costs, which can reduce the funds available for investments in areas like education, healthcare, and infrastructure. Conversely, if the debt remains low, interest payments are manageable, giving the government greater flexibility during crises.

At the same time, some level of national debt is not dangerous. In fact, borrowing for investments that strengthen the country in the long term, such as infrastructure, education, and innovation, can be wise. The key is that the debt remains manageable relative to GDP – and Sweden is among the best in the world in this regard.

International Perspective – Sweden Stands Out

Compared to other countries in Europe and globally, Sweden is in a strong position. Many EU countries have national debts exceeding 60 percent of GDP, and in some cases, much higher. Sweden's current level below 20 percent is a testament to its economic strength – though it’s important to monitor developments moving forward.

What’s Next?

The Swedish National Debt Office has already announced plans to increase the supply of government bonds to meet the growing borrowing needs. Starting in August, the issuance volume will rise to 4 billion SEK per auction, meaning the government will borrow 80 billion SEK in 2025. This is a response to the new economic realities.

At the same time, the outlook remains cautiously optimistic. Next year, Swedish GDP growth is expected to accelerate again, which could slow the debt increase. And although the national debt will rise slightly in the coming years, its level remains low both historically and internationally.

The National Debt – A Balancing Act

In conclusion, the national debt is a product of political priorities, economic challenges, and global trends. A low debt provides security and flexibility, but it is also important for the government to invest in the future. The Swedish model has proven sustainable so far – and with continued vigilance, we can hope it will remain so.

So even if today's figure of 1,171 billion SEK may seem staggering, it’s a sign that the Swedish economy remains solid. And this affects us all – from interest rates to welfare and future opportunities.