March 11, 2020 / 1:03 PM / a month ago

UPDATE 1-Swedish govt presents $300 mln extra budget bill to tackle coronavirus crisis

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STOCKHOLM, March 11 (Reuters) - The Swedish government outlined economic measures to deal with the coronavirus outbreak and its repercussions in a supplementary budget bill on Wednesday, handing additional funds to local authorities and more generous sick leave rules.

More than 4,000 people have now died as a result of the coronavirus outbreak and measures to contain the spread have hit supply chains, the travel industry and other sectors of the economy.

With worries growing the disease could tip the global economy into recession, governments and central banks are scrambling to limit the damage.

While Sweden, which has more than 350 COVID-19 cases, has not seen widespread disruption, the government has forecast the disease will nevertheless crimp economic growth this year to around 0.8%, about 0.3% lower than it would otherwise have been.

Finance Minister Magdalena Andersson told a news conference on Wednesday the government had not changed its forecast, but that “the risks are clearly on the downside”.

The Finance Ministry said in a statement the bill included temporarily shelving employees’ sickness qualifying day, and temporarily allowing companies to defer payments of companies’ social contribution fees and employees’ provisional taxes.

It also brought forward an agreed scheme for shorter work weeks, partly funded by the government, to May 1 from Aug 1.

“Our estimate in the current situation, which may need to be changed, is that it will cost 3 billion crowns ($317.46 million)in extra expenditure and on top of that we have tax credits of tens of billions of crowns,” Andersson said.

The government had already promised an extra 5 billion crowns to local authorities in its upcoming spring mini-budget and Andersson said it could do more if needed.

While the government has stepped in quickly to support the economy, the central bank said this week it saw no immediate need for action.

$1 = 9.4500 Swedish crowns Reporting by Niklas Pollard and Anna Ringstrom; editing by Johannes Hellstrom

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