SWEDEN: NDO Nov Report: Smaller 2026 Budget Deficit Than Consensus Expectations
Key figures versus consensus expectations below (priors refer to the previous borrowing report in May):
Budget Balance: 2024 and 2025 projections broadly in line with the forecasts we had seen, but 2026 forecast is on the lower end.
- 2024: -SEK78bln (vs -SEK71bln prior). Analyst estimates had ranged from -SEK65bln to -SEK90bln
- 2025: -SEK65bln (vs -SEK56bln prior). Analyst estimates had ranged from -SEK60bln to -SEK85bln.
- 2026: -SEK35bln. Analyst estimates had ranged from -SEK45bln to -SEK60bln
Nominal SGB issuance: In line with consensus for 2025, at the lower end for 2026.
- 2025: SEK100bln (vs SEK80bln prior). Analyst estimates had ranged from SEK90bln – SEK110bln
- 2026: SEK100bln. Analyst estimates had ranged from SEK100bln to 120bln, so towards the lower end of the range.
- Nominal bond auction sizes to be increased to SEK5bln from 2025. Broadly in line with expectations.
Inflation linked SGB issuance: Slightly larger than had been expected, considering the NDO’s plans to reduce the proportion of debt held in linked instruments.
- 2025 and 2026: SEK6bln. Analyst expectations had been for SEK4bln.
Additionally on auctions: “The Debt Office will also be switching from multiple-price auctions to single-price auctions for inflation-linked bonds in order to promote participation”.
Foreign currency issuance: “We also plan to issue foreign currency bonds next year and in 2026, corresponding to SEK 21 billion each”
Other Projections:
- General government debt to GDP (%) projections are unchanged at 33% through 2026.
- 2025 GDP growth projection is revised down to 1.9% (vs 2.3% prior), while CPIF is expected at 1.4% (vs 1.6% prior).