OECD Releases Economic Survey Of Sweden

by Ulrika Lomas, Tax-News.com

28 June 2002

In its Economic Review of Sweden, published this week, the Organisation for Economic Cooperation and Development (OECD) announced that the country's economic performance remains robust in spite of last year's economic slowdown, and predicts that its future prospects are bright.

However, the multilateral body added that: 'Macro-economic policies may need to adjust as the economy picks up, while structural reforms are needed to assure better medium-term growth prospects.'

In terms of taxation, the OECD review revealed that 'a significant part of the fiscal easing that has occurred over the last three years has been in the form of reduced income tax rates', and added that further fiscal stimulus amounting to around 1.75% of GDP has been provided this year.

Referring to the final step of a tax-cutting programme agreed upon in 2000, the OECD said that the decision to implement the fourth tranche of reductions in 2003 has not yet been taken.

However, it stated that: 'Such a move would be warranted for its beneficial structural effects and could be undertaken without unduly jeopardising public finances as even now the structural surplus is estimated to be around 2.5% of GDP.'

However, the report warned that any future tax cuts should be accompanied by offsetting savings in government expenditure.

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