Sweden’s government will work to reverse a 30-year stagnation in public and private investments to meet its main pledge of lowering unemployment.

Finance minister Magdalena Andersson said there's a big potential, since public investments as a share of the Swedish economy have been stable since the 1980s while private investments have dropped.

The Social Democratic-led government will target spending on roads and railways, including high-speed networks to connect the biggest cities, she said. It will encourage investments in projects by the state-run pension funds, and look at setting up debt-financed projects, Ms Andersson said yesterday.

Andersson, whose Social Democratic minority government took over last year, is running up against budget constraints to meet a promise of reducing unemployment to the lowest in the EU by 2020, levels not seen in more than a decade.

The government forecasts budget deficits through 2017 and has pledged to fully finance all spending measures. She said the government will ultimately be judged on bringing down unemployment, fixing the schools while keeping fiscal ledgers in order. Housing construction and refurbishments of low-income blocks, “will create a lot of jobs” she said. - (Bloomberg)