Sweden Plans to Halve VAT on Food to Stimulate Economy
The Swedish government intends to reduce the VAT on food to 6% in 2026 to invigorate household spending and economic growth. The temporary cut will last from April 2026 to December 2027, coinciding with an election year. The budget bill also includes 80 billion crowns in unfinanced measures.
In a significant move to stimulate the economy, the Swedish government announced plans to slash the VAT on food to 6% starting in 2026, according to Prime Minister Ulf Kristersson. The initiative aims to encourage spending among households and businesses, which have been cautious due to economic uncertainties.
Deputy Prime Minister Ebba Busch highlighted that this temporary VAT reduction would help households struggling financially, running from April 2026 to December 2027. Announced last week, the right-wing coalition's budget for 2026, an election year, includes 80 billion crowns of unfinanced economic measures.
The Swedish government predicts a GDP growth of 0.9% for this year, rising to 3.0% by 2026. Analysts anticipate that the forthcoming budget bill, set to be presented to parliament on September 22, might incorporate additional income and corporate tax cuts alongside elevated spending.
(With inputs from agencies.)
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