STOCKHOLM, April 15(Reuters) - Sweden's government said on Tuesday it will raise spending by around 11.5 billion Swedish crowns ($1.18 billion) this year, to support an economic recovery under threat from global trade turmoil.

Sweden's economy has struggled over the last couple of years but had been expected to pick up speed this year. Growth prospects have dimmed, however, in the face of new U.S. tariffs, putting rate cuts by the Riksbank back on the agenda.

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"The U.S. decision on significantly raised tariffs has caused concern ... However, Sweden is on stable economic ground and able to take further action should the need arise," Finance Minister Elisabeth Svantesson said in a statement.

Svantesson had already warned economic growth would be negatively affected by uncertainty surrounding the effects of tariffs announced by U.S. President Donald Trump.

Measures in the spring budget included a tax break for home renovations, plus extra money for schools, road maintenance and prisons.

The extra cash injection comes on top of a huge boost in spending following Russia's invasion of Ukraine as the government scrambles to rearm after decades in which the military has been downsized.

The military budget is set to rise to around 3.5% of GDP by 2030, while the latest package of support for Ukraine will bring Sweden's total commitment to around 80 billion crowns.

Sweden also plans a fleet of new nuclear reactors at a cost of around 300 billion crowns as well as increases in spending on other key infrastructure to support phasing-out the use of fossil fuels from transport and industry.

While many countries in Europe face tough spending choices, Sweden's state finances are in robust shape. Sweden's government debt was around 31% of GDP against an average of about 88% across the EU, according to the latest Eurostat figures.

($1 = 9.7551 Swedish crowns)

https://www.reuters.com/markets/europe/swedish-spring-budget-pledges-12-bln-extra-spending-2025-04-15/