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Sweden's economy unlikely to benefit from no-lockdown approach
Sweden's economy unlikely to benefit from no-lockdown approach

The measures taken by Sweden to stop the coronavirus spread have been less severe than in many other countries. Sweden is one of the few countries in the world whose authorities have refused to impose a lockdown. Citizens could move freely, companies continued to do business as usual, and the borders remained open. People were just recommended to follow the social-distancing rules and personal hygiene guidelines. However, the government tried to protect the particularly vulnerable group - people aged 60 or older - by limiting their contacts with the outside world. It is still hard to say whether such tactics have been successful in the fight against the pandemic or not. However, one thing is clear: Sweden's economy is likely to suffer as badly as other countries which imposed a full lockdown. The country's GDP is expected to contract by 6.9–9.7% in 2020. Experts have already called the economic decline “deep and strong”. However, despite this grim outlook, the local central bank does not intend to stimulate the economy by cutting the key interest rate. It argues that the impact of negative rates on GDP is mixed and therefore considers this move counterproductive. According to the regulator, these stimulus measures will not help the country's economy avoid recession. After all, the bank is sure that Sweden's economic slump will be less dramatic than in other Scandinavian countries.

Published: 2020-05-19 15:10:57 UTC
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