Sweden Is Getting Ready for Record Crisis
Sweden is bracing for a record economic crisis since World War II. This is happening against the backdrop of the country’s authorities’ refusal to impose a strict lockdown due to the coronavirus pandemic, Bloomberg writes.
Minister of Finance Magdalena Andersson said that this year the largest economy in Scandinavia will shrink by seven percent. Shortly after her announcement, Sweden experienced a record 30-fold surge in lending amid rising unemployment. According to surveys, 40 percent of service enterprises fear bankruptcy. Andersson noted that the country is now experiencing « a very deep economic crisis, the recession is happening faster than we expected. »
The economy of Sweden is dependent on external demand. About half of Sweden’s GDP is exported; some well-known companies, such as Volvo Cars and Electrolux, were forced to cut thousands of jobs as demand fell.
Sweden’s approach to the fight against the coronavirus pandemic was the topic of international debate, as the country’s authorities refused to introduce harsh restrictive measures. Shops, restaurants, gyms were operating in the country, while the authorities hoped that the population would observe precautionary measures and social distance.
Recently, a lot of analytical assessments and forecasts have appeared regarding how the country would survive the general economic crisis, and how it would be affected by the decision not to introduce a lockdown. A number of experts are confident that the impact of the pandemic on GDP will be the same as for quarantined countries.
According to the Swedish central bank, the country’s GDP, despite the rejection of quarantine, may be reduced by 9.7 percent in 2020. In a more positive outlook, the economy will sag by 6.7 percent.