STOCKHOLM, Aug. 22 (Xinhua) -- Sweden's Finance Minister Magdalena Andersson believes the country is entering an economic downturn, Swedish news SVT reported on Thursday.
"We have seen that several of the risks we pointed to have increased during the summer, such as both the trade dispute between China and the U.S., and a no-deal Brexit," Minister Andersson said.
However, according to Minister Andersson, Sweden is well-equipped to handle a cyclical slowdown.
"We have created order and control in the state finances and have made sure to pay off real government debt so that we have muscles for all eventualities," Minister Andersson told SVT during a press conference on Thursday, held shortly after a government gathering at the Swedish Prime Minister's residence of Harpsund, south of Stockholm.
"My assessment is that it would be unwise to pursue a sharply leaner policy in a situation where we see a cyclical slowdown," Minister Andersson said. "We have estimated that in this budget we have a reform space of about SEK 25 billion." (approximately 2.5 billion U.S. dollars)
Politicians who attended Minister Andersson's update on the Swedish economy expressed their concern about what the downturn will mean for social welfare and business prospects.
"The business cycle has deteriorated," said Elisabeth Svantesson, economic policy spokesperson for the Moderate party. "Germany's economy is suffering and the trade war between China and the United States has escalated. And in Sweden we now see that unemployment has risen and growth has shrunk," Svantesson added. "Now the Swedish economy is entering a new era and it is hugely important to prioritize. Citizens should know that we are investing in what is actually needed. The police should have resources, defense should be strengthened. Many municipalities also need extra resources."
"Many municipalities, often rural municipalities, are in a real financial crisis," Oscar Sjostedt, economic policy spokesperson for the Sweden Democrats' party, agreed.
"We can expect a budget that is not in line with the needs that exist. We need a policy of economic equality and investment in welfare. This government will increase economic inequality," Ulla Andersson, economic political spokesperson for the Left Party, told SVT. (1 U.S. dollar = 9.67 SEK)
