“The sharp economic downturn puts great pressure on central government finances”, national agency warns.

Sweden’s budget deficit will amount to 160 billion kronor (€15.2 bilion) this year mainly due to lower tax income, increased unemployment and costs related to stabilizing of the crisis-hit financial system, the Swedish National Financial Management Authority said in a report on Wednesday.

Next year the deficit in net lending will amount over 3 percent of Sweden’s gross domestic product, GDP. By doing so, the deficit will exceed the limit set in the EU Stability and Growth Pact.

“The sharp economic downturn puts great pressure on central government finances”, national agency warns. “We believe that further decisions on fiscal easing should be taken with great care: it is important in the current situation that confidence in the long-term sustainability of central government finances is not undermined”.