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SWEDEN: NDO Nov ‘24 Borrowing Report Preview – Increase In Issuance Expected

SWEDEN
CEEMEABulletSwedenMarketsFixed Income Bullets

The National Debt Office (NDO) is due to release its third (and final) borrowing report of the year on Thursday (Nov 28).  Analysts expect an increase in the 2024 and 2025 budget deficit projections compared with the May report, with additional borrowing concentrated in nominal SGBs. 

  • In the May report, the NDO forecasted the 2024 budget balance at -SEK71bln and the 2025 balance at -SEK56bln. These projections assumed (1) a SEK44bln capital contribution to the Riksbank, (2) SEK40bln of unfunded 2025 fiscal reforms and (3) a SEK32bln EU RRF payment in December 2024.
  • Since May, the Riksbank capital injection was confirmed at just SEK25bln, the 2025 budget included ~SEK60bln of unfunded fiscal reforms and the EU’s payment may be delayed till next year. Additionally, the actual cumulative budget balance since May is SEK25bln below the NDO’s projections. These factors will need to be incorporated into the November report.
  • The NDO announced in September that it would reduce the outstanding volume of inflation linked debt from SEK 177 billion to approximately SEK 80 billion by the end of 2029, as “the current proportion of 20% of total debt "neither contributes to reduced cost nor lower risk for the central government debt".
  • Analysts expect most of the accompanying reduction in linker debt to be absorbed by higher nominal bond issuance.
  • See this PDF for a summary of sell-side views and forecasts.
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The National Debt Office (NDO) is due to release its third (and final) borrowing report of the year on Thursday (Nov 28).  Analysts expect an increase in the 2024 and 2025 budget deficit projections compared with the May report, with additional borrowing concentrated in nominal SGBs. 

  • In the May report, the NDO forecasted the 2024 budget balance at -SEK71bln and the 2025 balance at -SEK56bln. These projections assumed (1) a SEK44bln capital contribution to the Riksbank, (2) SEK40bln of unfunded 2025 fiscal reforms and (3) a SEK32bln EU RRF payment in December 2024.
  • Since May, the Riksbank capital injection was confirmed at just SEK25bln, the 2025 budget included ~SEK60bln of unfunded fiscal reforms and the EU’s payment may be delayed till next year. Additionally, the actual cumulative budget balance since May is SEK25bln below the NDO’s projections. These factors will need to be incorporated into the November report.
  • The NDO announced in September that it would reduce the outstanding volume of inflation linked debt from SEK 177 billion to approximately SEK 80 billion by the end of 2029, as “the current proportion of 20% of total debt "neither contributes to reduced cost nor lower risk for the central government debt".
  • Analysts expect most of the accompanying reduction in linker debt to be absorbed by higher nominal bond issuance.
  • See this PDF for a summary of sell-side views and forecasts.