The center-right Alliance bloc, led by the Moderate Party of Prime Minister Fredrik Reinfeldt, has taken the lead in opinion polls over a rival centre-left bloc, but the race remains extremely close ahead of the Sept. 19 election.

Seizing on a sharp economic rebound and the soundest public finances in the 27-nation European Union, the two sides have been busy unveiling new election pledges to lure voters.

On Tuesday, the government said it aimed to spend 2.45 billion Swedish crowns ($330 million) between 2011 and 2014 to encourage entrepreneurs and improve conditions for businesses.

It also plans to cut VAT on restaurant meals over the same period in a move that would cost a total of 5.6 billion crowns. The government has committed to both steps for 2011, but said implementing the full measures over the four-year period will depend on the state of public finances.

The government has written 5 billion crowns in deductions for pensioners into its spring budget.

But recent economic developments have prompted it to announce additional measures. Data released late last month showed the Swedish economy grew at a 3.7 percent annual clip in the second quarter.

Last week, the government raised its forecast for gross domestic product (GDP) growth this year to 4.5 percent from 3.3 percent and said it expected a public deficit of just 1.1 percent of GDP.

The finance minister has said the improving economy means there is room for 10 billion crowns in new spending or tax cuts in 2011, or 30 billion to 40 billion over the coming four-year term.

This has led to a flurry of new fiscal promises.

In addition to the measures unveiled on Tuesday, the government pledged on Monday to cut taxes for pensioners by an additional 2.5 billion crowns in 2011 and said it would spend a further 5.8 billion crowns on health and geriatric care over the next four years if re-elected.

The latest poll, published on Tuesday, showed the center-right government in the lead with 48.7 percent of the vote versus the Social Democrat-led "Red-Green" coalition's 45.3 percent.

The center-left has promised to spend more on welfare, but also raise some taxes if elected. A hung parliament a possibility if the far-right Swedish Democrats squeeze past the 4 percent hurdle to get seats in Parliament.