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- Throughout the coronavirus pandemic, Sweden has drawn international attention for its unorthodox approach to managing the virus’ spread.
- Unlike most European countries, Sweden didn’t impose strict lockdown measures. Now it’s reaping the rewards — economically speaking, at least.
- A report from Capital Economics published on Tuesday found that the Swedish economy was the least harmed in Europe, describing it as the “best of a bad bunch.”
- Though Sweden was not immune to the pandemic’s economic impact, it was the only major economy to grow in the first quarter of the year, the report noted.
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Throughout the coronavirus pandemic, Sweden has drawn international attention for its unorthodox approach to managing the virus’ spread.
The Nordic state didn’t impose strict lockdown measures, instead asking citizens to stay home if they were sick and to practice social distancing in public. Bars, restaurants, and shops stayed open, even when cases peaked in the country.
Its relaxed coronavirus strategy, relying on personal responsibility and willful obedience, has been both praised and criticized. And while the jury is still out on the effectiveness of the country’s public-health approach, there is growing evidence that, economically speaking, the loose rules seem to have worked.
A report from the research firm Capital Economics published on Tuesday found that the Swedish economy was the least harmed in Europe, describing it as the “best of a bad bunch.”
Though Sweden was not immune to the pandemic’s economic impact, it was the only major economy to grow in the first quarter of the year, the report noted.
“The Swedish economy has weathered Covid well, thanks in part to the government’s light-touch lockdown, and our forecast of a 1.5% drop in GDP this year is well above consensus,” the economists Andrew Kenningham, David Oxley, and Melanie Debono wrote.
Capital Economics
As a group, Nordic economies seemed to have weathered the COVID-19 storm better and “got off lightly” compared with the rest of the world, the report said.
“A combination of decisive policy responses and structural factors will limit the damage wreaked by Covid in the Nordic economies — particularly relative to the euro-zone,” the economists wrote. “Nonetheless, policymakers will not rest on their laurels and tighter policy is years away.”
But the consequences of COVID-19 will persist, and activity across Nordic economies is likely to remain below pre-virus levels for the rest of the year, Capital Economics said.
Capital Economics predicted that while economic output — the total value of goods and services produced — in Denmark and Norway would fall by about 3% this year, Sweden would see an even smaller contraction.
Here are the short descriptions on the state of Nordic economies in the Capital Economics report:
- Sweden: “Best of a bad bunch in Europe.”
- Norway: “Bouncing back, but energy shake-out to constrain growth.”
- Denmark: “Quick lockdown exit helps to limit slump.”
