June 25, 2009 / 4:06 PM / 9 years ago

Swedish PM says no to extra stimulus in budget

STOCKHOLM, June 25 (Reuters) - Swedish Prime Minister Fredrik Reinfeldt said on Thursday he saw no room for further fiscal stimulus in the Nordic country when his government presents its next budget later this year.

Reinfeldt said in a Reuters interview his centre-right government had rolled out substantial measures to boost the economy. "At this time, I don’t forsee that we have an opening for any kind of reforms in the autumm budget, if we are not able to finance them," Reinfeldt said.

Sweden is in the clutches of what is expected to be its worst recession since the 1940s as the global downturn has savaged demand for top exporters such as world number two truck maker Volvo (VOLVb.ST) and bearings maker SKF (SKFb.ST).

The unemployment rate is expected to reach double digits in 2010, an election year. This week, the Organisation for Economic Cooperation and Development forecast Sweden’s economy will shrink 5.5 percent this year and show marginal growth in 2010.

The government has been trailing in polls but approval ratings have improved in recent months due to its handling of the financial crisis. Reinfeldt said fresh tax cuts might be carried out if his coalition were re-elected.

"Yes, I think so," he said. "But it’s also important to say that the structure of lowering of income taxes should still be the main focus on low income earners."

(Reporting by Niklas Pollard and Johan Sennero)

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