Sweden’s central government budget was close to balance last year, boosted by strong economic recovery and higher tax income, the Swedish National Debt Office said Tuesday.

The Swedish central government payments resulted in a deficit of less than 1 billion kronor 2010. It is a big improvement compared with 2009.

“This is due to the strong recovery in the Swedish economy, which led to higher tax income, while expenditure growth was moderate”, the Dept office said.

Central government debt was 1,151 billion kronor at the end of 2010, corresponding to 35 percent of GDP.

"The Swedish economy is growing at a record rate", the Swedish Riksbank said last month as it hiked its most important key interest for the fourth time since July. The economy increased 6.9 percent in the third quarter, its fastest rate since the statistics agency began its quarterly measurements in 1970.

Compared to 2009 the deficit decreased by as much as 175 billion kronor. More than half of this is explained by on-lending to the Riksbank in 2009. The remainder can be directly linked to the rapid recovery in the economy, which clearly illustrates the central government budget's sensitivity to the business cycle.