Swedish defence budget continues upward trajectory

Sweden's Finance Ministry submitted the country's 2022 budget bill to parliament on 20 September, allocating SEK76.77 billion (USD8.6 billion) to defence and crisis preparedness for 2022, a nominal increase of 7.6% or 6.2% in real terms compared with 2021. The defence budget reached 1.45% of GDP, the highest level since 2005, after fluctuating between 1.1% and 1.3% during the decade to 2020.

Sweden's defence budget has been on a steady upward trajectory since 2014, with growth most noticeable since 2018, when it was increased by a nominal 6%. This was followed by nominal increases of 11.6% in 2019, 7.9% in 2020, and 9.8% in 2021. The 2022 budget is almost 40% higher in real terms than that of 2017, which was just under USD6.2 billion.

This increase is partly driven by investment spending. Allocations for section 1:3 Anskaffning av materiel och anläggningar (Acquisition of equipment and facilities) increased from SEK10.4 billion in 2017 to SEK19.8 billion in 2022 and from 22–25% of the core budget in 2017–20 to 28% in 2022. They are set to increase further, reaching SEK27.5 billion and 32.5% of the core budget in 2024.

As such, according to the official forecasts in the 2022 bill, the overall defence budget is set to continue its upward trajectory, with nominal increases of 8.3% in 2023 and 9.4% in 2024. According to the Total Defence 2021–2025 bill released in October 2020, the 2025 budget should also increase, approaching SEK100 billion, almost double its 2016 level. In real terms this means it would exceed USD10.5 billion and 1.7% of GDP.

The Total Defence 2021–2025 bill mentions “the deteriorating security situation in Sweden's neighbourhood”, including Russian actions in Georgia and Ukraine, as a driving factor for the increases.