National Debt

Sweden's national debt is increasing – but remains low historically

Current figures on the national debt

Sweden’s national debt now amounts to 1,243,878 million SEK, corresponding to approximately 1,243.9 billion SEK. This represents 19.46 percent of the country's gross domestic product (GDP). The debt has increased by over 100 billion SEK since the beginning of the year, and just in the last month, it has grown by about 26 billion SEK. Despite the increase, the current debt level is low in a historical context.

Drivers and financing

The national debt is primarily influenced by the government’s budget balance – the difference between income and expenses. When the government runs a deficit, it needs to borrow money, mainly through issuing government bonds and treasury bills by the Swedish National Debt Office. The Debt Office is responsible for managing and financing the debt responsibly, ensuring borrowing occurs at the lowest possible cost without risking market stability.

Interest costs and maturity

The interest rate on the national debt directly affects the government’s costs – when interest rates rise, so do the interest expenses. The maturity of the debt, meaning how long the loans run before repayment or refinancing, influences how quickly interest rate changes impact the government’s finances. A longer average maturity provides some “buffer” against sudden rate hikes but can also mean the government pays higher interest than the market rate if interest rates fall.

Development of the national debt – historical snapshots

• Today: 1,243.9 billion SEK (19.46% of GDP)
• 2021: 1,270.1 billion SEK (23.15% of GDP)
• 2010: 1,167.6 billion SEK (32.67% of GDP)
• 2000: 1,358.4 billion SEK (56.41% of GDP)
• 1995: 1,326.1 billion SEK (69.55% of GDP)
• 1975: 64.1 billion SEK (19.13% of GDP)

The Swedish national debt has historically been significantly higher relative to GDP during much of the past 50 years. Notably, during the economic crisis of the 1990s, the debt ratio quickly rose above 70 percent of GDP.

What does the national debt mean for households and businesses?

The level of the national debt affects how much resources the government needs to allocate to interest payments instead of welfare, infrastructure, or tax cuts. A low debt ratio provides greater flexibility during crises, while a rapidly growing debt can lead to higher interest rates or future austerity. Changes in the national debt can influence interest rates and economic stability for households and companies.

Outlook

The national debt could continue to grow if the government runs deficits or if the economy weakens. Conversely, strong growth, surpluses, or the sale of government assets can reduce the debt relative to GDP. The future levels depend heavily on interest rate trends and economic developments.

Frequently asked questions about the national debt

• What is the national debt?
  The national debt is the total sum of the government’s borrowings, meaning how much the government owes to lenders both within and outside Sweden.
• Who is responsible for managing the national debt?
  The Swedish National Debt Office (Riksgälden) is responsible for managing and financing the debt on behalf of the government.
• How does the interest rate affect the national debt?
  Higher interest rates increase the government’s borrowing costs, potentially leading to higher interest payments.
• What does the debt-to-GDP ratio indicate?
  The ratio shows how large the debt is relative to the entire economy. A lower ratio is often viewed as more sustainable.
• Can individuals buy government bonds?
  Yes, individuals can purchase government bonds through banks or securities firms acting on behalf of the Swedish National Debt Office.