Stockholm - Sweden is prepared to weather the global economic downtown, Finance Minister Anders Borg said Monday when he presented the centre-right coalition's budget bill.

"This budget is a strong package aimed at softening the downturn in the global economy," Borg told parliament.

"Dark clouds were gathering and cast a shadow over Sweden," Borg added when he presented his third budget since conservative Prime Minister Fredrik Reinfeldt took office in October 2006.

The government is trailing the opposition in opinion polls at half-time in its term. Many details in the budget were released in advance as the government has sought to shore up its support.

Economic growth was forecast to be 1.5 per cent this year, Borg said, lowering the earlier estimate of 2.1 per cent.

In 2009, the Swedish economy was forecast to grow just 1.3 per cent but would rebound to 3.1 per cent in the election year of 2010.

The consumer price index (CPI) was predicted to drop to 2.8 per cent in 2009 and continue down to 1.3 per cent in 2010, the bill said.

Unemployment was predicted to grow from the current 6 per cent to 6.6 per cent in 2010 before dropping to 6 per cent in 2011.

Thomas Ostros of the opposition Social Democrats slammed the proposal, saying the government had squandered chances to combat unemployment, noting the number of jobless "would be higher in 2010 than 2006 when the government took office."

The main thrust of the budget was a 16-billion-kronor (2.4 billion dollars) package of lower taxes for businesses to stimulate them to hire new employees, and some 15 billion kronor in other tax cuts.

The government also planned more investments in roads and railways as well as on research and the environment.

Foreign aid next year would be 1 per cent of gross domestic income or 34 billion kronor, according to the budget bill.

Some 1.3 billion kronor was earmarked for efforts to tackle climate change in developing countries, International Aid Minister Gunilla Carlsson said, noting that Africa would remain a priority for Sweden.

Plans to close several military bases and units that were announced earlier this year were put on hold, as the government opted to cut spending on defence equipment upgrades and weapons development programmes through 2011. (dpa)