By Emese Bartha

Lower economic growth and increased government-bond spending weigh on Sweden's central budget, leading to lower surplus this year and next, the National Debt Office said in its borrowing review Tuesday, raising short-term debt issuance but leaving domestic-bond issuance unchanged.

"After very high growth last year, the war in Ukraine slows growth internationally and in Sweden, while inflation rises," the NDO said.

The NDO expects Sweden's gross domestic product to grow 2.2% in 2022, down from 3.2% it saw previously, while it left the GDP forecast unchanged at 1.8% in 2023.

The NDO sees Sweden's budget surplus at 102 billion Swedish kronor ($10.40 billion) in 2022, down from SEK139 billion it saw in its previous review in February. It sees a surplus of SEK75 billion in 2023, down from SEK90 billion expected previously, it said.

The debt office left the issuance of nominal government bonds unchanged at SEK46 billion in 2022 and SEK40 billion in 2023. It also left unchanged the planned issuance of inflation-linked bonds at SEK9 billion this year and also at SEK9 billion next year.

"In keeping with the Debt Office's strategy of adapting the short-term borrowing first, the volume of treasury bills is being adjusted upward," the NDO said, adding that it was also planning to issue a foreign-currency bonds in 2022.

Write to Emese Bartha at emese.bartha@wsj.com

(END) Dow Jones Newswires

May 24, 2022 04:09 ET (08:09 GMT)