Slower growth in an uncertain world calls for investment in innovation and entrepreneurship
On Tuesday, a united Finance Minister presented the Government's Spring Fiscal Policy Bill and spring amending budget to the Riksdag, emphasizing that Sweden is stable in an uncertain and somewhat unpredictable world. "We are in a recession, but the recovery in the Swedish economy has begun, but there is considerable uncertainty abroad, which is expected to weigh on the recovery.
The labor market situation has clearly weakened and the employment rate has declined. Unemployment is expected to continue to rise in 2025 to 8.6%, and it is expected to remain high in 2026 as well. This is mainly due to the difficulty of young people entering the labour market. Inflation has been higher in early 2025 but is expected to stabilize close to the inflation target in 2026. We also see a strengthening of the krona in the spring.
Although the economic situation is expected to improve in the future, we are living in uncertain times. Rapid shifts in trade and security policies are creating new risks. Stock markets have been turbulent in the early part of 2025, driven by tariffs that have a direct impact on growth and risk appetite and could lead to higher inflation. Several challenges remain before we can put the recession behind us. Global uncertainty is setting much of the pace. However, Elisabeth Svantesson emphasized that Sweden has good finances to be used in worse times.
The tech sector is also in wait-and-see mode, with companies seeing neither clear growth nor continued decline. In today's uncertain times, the tech industry is affected by investors becoming more cautious and growth expectations being adjusted downwards.
It is a spring budget that emphasizes that an economic recovery is underway, but it is too slow and that further stimulus is needed in the Swedish economy. The main focus is on initiatives to stimulate the economy, reduce unemployment and equip the armed forces.
A number of areas where the government's spring bill leaves a digitization policy imprint that deserves to be highlighted and where TechSverige has been a driving force.
Thin on digitalization in anticipation of new digitalization strategy
The spring amending budget does not contain any new initiatives linked to the two authorities that, after a future merger, will form Sweden's new digitization authority, the Swedish Post and Telecom Agency (PTS) and the Swedish Agency for Digital Government (Digg). A reallocation of SEK 1 million is made within PTS to enable the authority to implement the new data regulation starting in September 2025. The spring amending budget also does not contain any adjustments based on the new digitization strategy that will be presented later this spring and can therefore be expected to have an impact on the budget this autumn.
Conditions for (right) skills development are crucial for continued growth
The spring budget amendment contains new funding for the Swedish Higher Vocational Education Authority (MYH) for more places on short courses in 2025, which is good. Otherwise, important skills enhancement initiatives are missing, which is something we hope will be addressed in the fall budget bill. There is no lack of proposals on the table to pick from. The AI Commission, for example, in its Roadmap for Sweden, raises several proposals, including the importance of increasing AI knowledge throughout the population, skills development for teachers to meet the constant (technological) development, as well as lifelong learning. This requires incentives and conditions. TechSverige has also developed concrete proposals for the government to take forward in the upcoming budget, such as making a special effort to integrate AI into existing and new education, to equip students for the digital future, which includes continuous skills development for teachers and principals, and to introduce a targeted tax deduction for companies' skills-enhancing activities in digitization, AI, information and cyber security.
Government strengthens cybersecurity - but gaps in the overall approach remain
The Government is highlighting hybrid threats, including cyber threats. The Swedish Civil Contingencies Agency (MSB) and the Swedish Psychological Defense Agency (MPF) are allocated a total of SEK 12 million to strengthen their hybrid work. Nine of these SEK 12 million will go to MSB to contribute to the EU's and NATO's rapid response teams by strengthening coordination of responses to hybrid activities. The MPF will receive SEK 3 million to assist in the work of rapid response teams to counter undue information influence and to strengthen Sweden's psychological defense. The Government is also allocating SEK 7 million to the National Coordination Center for Cybersecurity Research and Innovation (NCC-SE) at MSB to strengthen research and innovation. Investments in research and innovation are welcome steps in the right direction, but more and different kinds of measures are needed to bring order to the government's information security policy, where unclear division of responsibilities and overlapping regulations are still problems.
Government highlights AI - but misses opportunity for faster impact
The spring amending budget contains several proposals to drive the development and use of AI, in which TechSverige and its member companies have been a driving force. The Prime Minister highlighted these in a debate article in Dagens Industri on 14 April, where he mentioned, among other things, the "regulatory sandbox" at the Swedish Authority for Privacy Protection (IMY), an AI workshop in the public sector, strengthened work against disinformation, and investments in AI linked to defense. The potential for increased productivity in the public sector with the help of AI is great. An AI workshop is therefore a positive step, but it is particularly important that the expertise of the business sector is utilized in this work and that the designated authorities, the Swedish Social Insurance Agency and the Swedish Tax Agency, do not start acting as market players.
The AI Commission's roadmap mentions several proposals to get started right away, including appointing a special group to start working on AI issues. "With an 'AI task force', we can achieve a faster impact for measures that strengthen AI in Sweden. This could, for example, involve removing regulatory challenges or raising skills and promoting Swedish competitiveness in the global tech race. The government is missing the mark by not realizing the importance of speed by not addressing these proposals already in the spring amending budget.
Increased empowerment for climate transition - welcome but not groundbreaking
To accelerate the climate transition, the Government and the Sweden Democrats propose an increase in the authorization for Klimatklivet to SEK 6.5 billion and an addition of SEK 2.2 billion to Industriklivet, which will be taken from Klimatklivet 2025. They say that the funds allocated for the year are unlikely to be used due to the fact that the projects funded are often multi-year and they want to accelerate the industry's transition in this way. The support for Industriklivet is intended to promote innovation in new technologies that would not otherwise have been realized. Welcome, of course, but nothing groundbreaking.
In summary, the Spring Fiscal Policy Bill signals a cautious economic recovery but also points to continued high unemployment and global uncertainty. The focus is on stimulating the economy, reducing unemployment and strengthening defense. Some progress is being made in the tech sector, including in AI and cybersecurity, where TechSverige has been a driving force. At the same time, there are no major investments in digitization and skills development - areas that are crucial to Sweden's future competitiveness. This fall's budget bill should focus on creating good conditions for innovation, tech entrepreneurship and growth to support the economy, tackle the societal challenges we face and strengthen Swedish competitiveness.
Christina Ramm-Ericson, Chief Economist