Sweden's Strategic Shift: Investing in Defense for Future Generations

Sweden plans to borrow 300 billion crowns to enhance its defense capability and infrastructure, with a focus on achieving a military spending target of 3.5% of GDP by 2032. The decision follows Sweden's NATO membership application after Russia's Ukraine invasion. Priorities include expanding army size, capabilities, and ammunition stocks.

Sweden is set to undergo a major transformation in its defense strategy, borrowing 300 billion crowns as part of an agreement with opposition parties. This move aims to bolster the nation's military capabilities and meet NATO's spending target of 3.5% of GDP by the year 2032, following its recent membership application.

The focus will be on expanding and enhancing the army, air defense, and ammunition reserves, with 250 billion crowns allocated to military upgrades. An additional 50 billion crowns will support civil defense and infrastructure improvements. Finance Minister Elisabeth Svantesson emphasized the importance of this step for future generations' security.

Despite strong public finances, this initiative will temporarily raise government debt by three percentage points. However, fiscal balance is anticipated by 2035. While the government shies away from raising taxes, alternative sources such as the aid budget and spending cuts are being considered to cover the costs.

(With inputs from agencies.)