Finance Minister Anders Borg revised his forecast for 2010 Swedish gross domestic product growth to 4.5 percent from the previously expected 3.3 percent.
The minister also upgraded his outlook for next year to 4 percent, from 3.8 percent, and said he expects to reach the target of a 1 percent public finance surplus already by 2012.
Borg said Sweden’s quick recovery from the global financial crisis has been supported by both domestic demand and exports, but warned financial concerns in other parts of the world could cause new problems for the economy going forward.
Sweden holds parliamentary elections Sept. 19. Considering the strong public finances, the center-right governing alliance said it sees room for tax reforms of 10 billion kronor ($1.4 billion) in 2011 if it is re-elected.
Borg said additional tax reforms may also be possible toward the end of the next four-year mandate period, but said the government should be cautious not to promise too much.
"The GDP growth is strong. But the risks are big, primarily if we look
at the world around us, where many countries have very big problems with
their public finances," Borg said in a statement. "Our highest priority
is to return to a surplus to be able to defend Sweden against new
threats."
