Sweden is set to abandon its long-standing surplus target for state finances, replacing it with a balance target.

This decision, supported by six of the eight parliamentary parties, aims to allow deficits during economic downturns to be offset by surpluses in better times.

The move is expected to increase the budget space by approximately 25 billion kronor annually, providing more flexibility for future governments.

However, the decision has sparked criticism from within the Social Democratic movement, with figures like LO's Johan Lindholm and SSU's Lisa Nåbo expressing concerns that the new approach may not adequately address Sweden's pressing needs in infrastructure and education.

Despite the criticism, Finance Minister Elisabeth Svantesson believes the balance target will provide sufficient financial margins.

The shift marks a significant change in Sweden's economic policy, which has been in place since the 1990s.