Sweden turns on spending taps to revive stumbling economy
◆ Sweden has loosened the purse strings to unveil a £9.3bn spending and tax cuts boost for its economy after suffering a major slump despite its light-touch lockdown, writes Tom Rees.
The Social Democrat and Green coalition turned on the spending taps with a “record-large budget to restart the Swedish economy” despite being spared from the worst of the Covid-19 damage.
The coalition relaxed fiscal policy with a package focused on creating jobs, boosting welfare and fighting climate change.
Sweden suffered a record plunge in GDP in the second quarter, down 8.6pc compared to the previous three months.
After initially surging, Covid infections in Sweden have fallen to low levels and there is little sign of a second wave. Its approach has relied on voluntary social distancing and bans on large gatherings in a marked difference from its Nordic neighbours.
“The Nordic countries including Sweden have performed better than the eurozone in aggregate,” said David Oxley at Capital Economics. “It was not unscathed but less than a sudden stop in activity as other places have seen.”