The Swedish way of tackling the coronavirus seems to have helped the economy escape the worst. The death toll however looks comparatively high.
The bare number of deaths from the coronavirus in Sweden suggests that the Nordic country is paying a heavy price for its liberal approach: a total of 2,854 people have died from the virus in Sweden according to the statistics compiled by the Johns Hopkins University. This is almost three times as many as in the three neighboring countries of Finland, Denmark and Norway taken together (964). The statistics of course are influenced by the methodology applied (for instance whether only people dying in hospitals are counted), but the trend seems pretty clear, given the extent of the difference.
The Economy Is Doing Better
The risk that the country has taken with its liberal approach seems to have paid off in terms of economic performance, according to first indications. SEB, one of the big three Swedish banks, on Wednesday published a first analysis of the situation (in Swedish).
«The softer lockdown strategy has cushioned the slowdown of growth in Sweden compared with other countries,» the bank said in its «Nordic Outlook».
Exports to Fall 15 Percent
The strongly export-dependent Swedish economy will still be hit hard by the pandemic and the measures to contain it. While most industries kept going throughout the crisis, demand from within the country and from abroad dropped significantly. SEB expects exports to fall by 15 percent for the full year.
The economists of SEB estimate that Sweden lost about a fifth of its GDP in April – which is substantially less than the 30 to 35 percent of Italy and France. SEB also says that the comparison with neighboring countries, which had much stricter rules in place than Sweden, revealed a similar delta.
Unemployment to Remain High Despite Rebound
For the full year, Sweden will have a minus of 6.5 percent (Switzerland expects a minus of 6.7 percent). Denmark and Finland, which in recent years had a comparable economic dynamic as Sweden, face a drop of 10 and 9 percent respectively. Norway, which had expected growth of 3.6 percent (which would have been three times the growth rate of Sweden) now face a drop of 6.1 percent, according to SEB.
The Swedish bank also forecast a rebound for 2021, with a plus of 5 percent for the Swedish economy. Unemployment however will lag the improvement of the economy and remain at an average 11 percent in 2021, the same as in 2020. In 2019, the country had an unemployment rate of 6.8 percent.
