Sweden’s no to the lockdown is debating, but GDP has earned it


AGI – La Sweden in the fight against coronavirus it went against the current compared to the rest of the world. His ‘approach’ to the spread of the pandemic has been very soft and has led to discussion: practically no lockdown, zero closings for primary schools, shops, malls and bars, just a few protective screens between shopkeepers and customers, the invitation to respect distances and personal hygiene, but without raising the tone too much. Offices and factories remained open, with an invitation to work from home and not to go out in case of illness. The Swedes continued to travel and move around without limitations. In short, Sweden has not ‘closed’ and its economy in the first quarter was the only one with plus sign among those in advanced countries: + 0.4% compared to a year earlier and + 0.1% compared to the previous three months. The figure for the second quarter has not yet come out and by the end of the year the rather discordant estimates are not bad.

The debate on the economy in Sweden

The Swedish government expects a 6% drop in GDP this year, against -3.5% in Denmark and -4.1% in Norway, the other two Scandinavian economies which, unlike Stockholm, have introduced lockdowns their economies are abundantly closed. Lars Calmfors, emeritus professor of international economics and researcher at the University of Stockholm, said that it is possible that Sweden has done better than other countries, but that it is still too early to say. “We have closed fewer than other countries, which might suggest that we have done a little better so far. But will it all depend on what will happen in the autumn: have we reduced the spread of the infection enough or will it increase again? If it increases, our economy will suffer. ”

More optimistic than Calmors, is the Swedish chief epidemiologist, Anders Tegnell, the mind of the government’s ‘soft’ strategy, according to which the Swedish population may have achieved a sort of “partial flock immunity” that would make it ready to face the second Coronavirus wave, scheduled for autumn. “In the autumn there will be the second wave – said Tegnell in an interview with the Financial Times – and Sweden will have a high level of immunity and the number of cases will probably be quite low. On the contrary, will Finland have to close everything? ”.

Conflicting estimates of GDP growth

Economic estimates of Swedish GDP growth are actually rather ballerinas. Capital Economics, a macro consulting firm, reported in July that it expects surprising growth of 1.5% for this year, while for Denmark and Norway it estimates an -3% annual increase. The large international bodies are more pessimistic. The OECD, in its latest Outlook, places the GDP growth forecasts for Sweden between -7.8% and -6.7%, depending on the seriousness of a potential second wave. And it puts Denmark slightly ahead with a fork including -7.1% and -5.8%.

The European Commission sees slightly less black and estimates a -5.3% for Sweden, against -8.7% in the Eurozone and -5.25% in Denmark. Statistics Sweden’s most recent data show that household consumption has decreased by around 4.5% since the beginning of the year. At the beginning of April, Riksbank, the Swedish central bank, had foreseen a catastrophic scenario for 2020: -6.9% in the most optimistic case and -9.7% in the blackest case. In July, however, the central bank updated its projection. Now the two scenarios project a range between -4% and -5.7% of GDP growth, that is to say, a clearly less bad 2020 than that of most other advanced countries.

Better than expected the accounts of large Swedish companies

While the controversy between pros and cons of the Swedish soft approach is raging, the Financial Times notes that most of the country’s big companies, in the early summer, all posted better than expected earnings. From Nokia to the big TLC Ericsson, to Elettrolux, world leader in household appliances, to the Handelsbanken bank, to the Assa Abloy equipment chain, all went better than expected. “I have never seen such a high proportion of companies make better than expected profits in the second quarter. Almost all the companies have done so, “Esbjorn Lundevall, chief equity strategist of Seb bank, told Ft.

“Keeping the society open, the schools open, does not mean that we have not been affected. But it means that we were not obliged not to leave our homes. This undoubtedly helped the companies”, Alrik Danielson, director, also told Ft delegate of the Swedish ball bearing manufacturer Skf, a Goeteborg-based group that kept its offices open in Sweden during the crisis and whose operating profits in the second quarter decreased by almost half compared to a year ago, but they have risen by more than a third compared to analysts’ expectations. “We have quickly adapted to the new reality, even if we don’t know how it will proceed,” explained Danielson. The actions of Skf, whose ball bearings are used by machines for paper to cars, they are basically flat since the beginning of 2020, but have increased by more than half since their lowest point reached in March, when the pandemic broke out.

But the human costs of the government’s choices are controversial

The government’s ‘sotf’ approach has certainly done good to the spirit of the Swedes who, in general, have faced the pandemic with greater optimism and with more confidence than those who have been forced to stay indoors. However, the number of infections and deaths in Sweden has been high, especially in relation to the population. Currently, coronavirus cases in Sweden are over 80,000 units and deaths at 5,700, with particularly high peaks. especially among the elderly population.

The budget is much higher than that of other Scandinavian countries. Sweden, which has 10 million inhabitants, has experienced more infections and more deaths than Norway, Finland, Denmark and Iceland combined, which together have 17 million inhabitants. In total, these 4 countries currently have over 32,000 infected and around 1,200 deaths.


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