Swedish spending on refugees to more than double this year

[STOCKHOLM] The record 160,000 asylum seekers who arrived in Sweden last year will force Stockholm to more than double spending on immigration, the minority coalition government said in its supplementary budget on Wednesday.

Total spending on refugees will rise to 50 billion crowns (S$8.35 billion) in 2016, out of a total budget of around 950 billion, and up from an earlier estimated 19 billion this year.

Spending on new items in the budget totalled only 1 billion crowns this year, it added. The increased spending of around 30 billion crowns because of immigration will cover higher costs related to existing measures, such as housing.

Despite the soaring costs of the asylum crisis, the budget deficit is seen narrowing to 0.4 per cent of GDP from an earlier expected 0.9 per cent, helped by faster growth.

The government expects the economy to grow by 3.8 per cent rather than the 3.1 per cent forecast in late December. "However, the economic forecast is uncertain and there is a substantial risk of a weaker outlook," it said in a statement.

Sweden's economy, driven by a high domestic demand and increasing exports, is one of the strongest in Europe. In 2015 the economy grew 4.1 per cent, causing Finance Minister Magdalena Andersson to compare it to a Maserati sports car.

Andersson has also previously announced an extra 10 billion crowns to regional and local authorities in the coming autumn budget to cope with costs of processing record numbers of asylum seekers.

The government has already outlined some other measures in the autumn budget, including closing a tax loophole for banks and lower payroll taxes for one-man companies.

REUTERS