UPDATE 1-Swedish government raises growth forecast, eyes more spending as elections near

Sweden's center-left government lifted its economic growth forecast on Thursday and said it sees more room to increase spending, as it seeks to revive flagging popularity ahead of national elections next month.

It repeated earlier messages that the budget for 2019 would include tax cuts for pensioners and investments in fighting climate change and in reducing disparities in schools.

With election campaigns kicking into high gear before a vote that could redraw the political landscape in Sweden, Finance Minister Magdalena Andersson told a news conference she saw room for the total unfinanced spending of 25 billion-26 billion crowns ($2.7 bln-2.8 bln) next year.

Economic growth this year was now likely to be 2.9 percent, rather than the government's previous forecast of 2.6 percent, she said.

"We see a good, stable growth during the coming years," Andersson of senior coalition member the Social Democrats told reporters.

Swedish public finances are strong after years of economic growth that has outpaced most other European countries and helped push down unemployment.

But worries among voters about gang violence, immigration, and a strained welfare system have bolstered support for the nationalist Sweden Democrats, with polls suggesting it might even rival the Social Democrats and center-right Moderates in size after the vote.

Meanwhile, Prime Minister Stefan Lofven's Social Democrats, the country's biggest party, is at risk of suffering its worst election in more than a century while its junior coalition partner, the Greens, are also struggling in the polls.

Many analysts expect the coalition may not last past the elections.

The government said it raised its growth forecast for 2018 on the back of a higher-than-expected preliminary growth reading for the second quarter. The flash reading in July indicated year-on-year growth in the second quarter hit 3.3 percent.

The government reiterated its forecast for economic growth of 2.1 percent in 2019.

It said it now sees a public finance surplus this year of 1.0 percent, up from 0.7 percent in June.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)