Sweden’s economy less disrupted by virus

SWEDEN’S economy has fared better during the peak three months of the coronavirus pandemic than the European average, the country’s statistics agency has reported, adding to evidence that a decision to avoid full lockdown is paying economic dividends.

The country’s gross domestic product fell by 8.6 per cent in April to June, compared with the preceding three months, Statistics Sweden said.

The average drop of the 10 member states who have submitted flash estimates for the three months is 11.9 per cent, the EU’S statistics agency reported last week. Spain, France and Italy did worse, with their economies contracting by 18.5, 13.8 and 12.4 per cent respectively. It was the biggest quarterly drop for Sweden since 1980.

Magdalena Andersson, the finance minister, none the less welcomed the figures. “It’s a historic fall, but at the same time, less than in many other countries, and actually less than I was expecting back in June,” she said.

Sweden kept open primary and lower secondary schools, kindergartens, restaurants, bars, offices and shops throughout the pandemic, although the government and health officials insisted this was not motivated by a wish to protect the economy.

Robert Bergqvist, chief economist at the country’s SEB bank, said the figures confirmed trends his analysts had been seeing for some time. “We had a substantial slowdown, but not of the same magnitude as we saw for other countries,” he said. Giving three reasons for the milder hit, he said: “The first is this flexible attitude to lockdowns, the second is that we have a different composition to our economy – we’re not very dependent on tourism – and the final reason is that the Nordic countries have a better digital infrastructure, which means we can move the economy into this digital world.”

Denmark and Norway both imposed tougher lockdowns, but are, according to forecasts, still expected to see a slightly lower fall in GDP than Sweden, largely because of Sweden’s substantial iron ore, steel and forestry industries.