Sweden's government will cut fuel taxes and hike electricity subsidies in its spring mini-budget, it said today, as it strives to ease the pain for households of higher energy bills driven by the war in Iran.
The extra spending, coming ahead of a parliamentary election in September, will total 7.7 billion crowns ($825m) and comes on top of a bumper 80 billion in new spending already announced in September last year in the full-year budget bill for 2026.
"Sweden is on the right path. Despite war and uncertainty abroad the Swedish economy is strong and we continue to build safety barriers around it," Finance Minister Elisabeth Svantesson said in a statement.
Oil prices have soared since the US and Israel launched attacks on Iran, leading Tehran to respond with missile strikes across the Gulf and closing the Strait of Hormuz.
While Sweden's economy has so far shrugged off any major effects, there are concerns a long-lasting conflict could push up inflation, hit growth and lead to higher interest rates.
The temporary boost to electricity subsidies for households in the spring budget will cost 2.4 billion crowns and the cut to fuel taxes 1.6 billion.
Other measures include more money for Sweden's space programme, healthcare and job creation.
Sweden in the September budget promised tax cuts and more money for schools, healthcare and defence to boost sluggish growth and woo voters still feeling the squeeze from a period of high inflation.
Sweden's political balance ahead of the vote is complex. While the left bloc has a slight advantage over the right, both sides could struggle to form a majority government.
Unlike most of Europe, Sweden's public finances are rock-solid.
Debt is expected to peak at around 38% of GDP in 2028 against an average currently in the EU of around 88%, according to Eurostat.
