Sweden’s decision not to impose a mandatory national lockdown has drawn global attention from policy makers eager to judge the strategy’s impact on public health and the economy. But it turns out the situation here is not as different as it might first appear.
Even without legal prohibitions, many Swedes are voluntarily following authorities’ social-distancing recommendations and limiting travel, pushing down domestic consumption. And the country can’t insulate itself from lockdowns among its trading partners. Exports are falling.
The result: Sweden’s economy is contracting, but not by as much as some others in Europe. Meanwhile, it is recording deaths per capita from the virus that are considerably higher than in neighboring countries—though below levels seen in France, Italy and the U.K.
Shops, restaurants and even nightclubs have been allowed to stay open in Sweden. There are no curbs on the manufacturing and services industries. But that doesn’t mean life is normal here. . . .
All of that is contributing to what Sweden’s government estimates will be a 6% contraction in domestic consumption this year. Combined with a forecast 10% drop in exports, Swedish authorities predict, the result will be a 7% decline in overall 2020 economic output. The eurozone economy as a whole is projected to contract by about 8% this year, according to a European Commission estimate.
Deaths per capita from Covid-19 in Sweden are at 301 per million inhabitants, lower than France and the U.K., but much higher than in neighboring Denmark, Finland and Norway, with 87, 46 and 40 per million, respectively. Public-health experts say the infection rate appears to be slowing. . . . The Gripsholms Värdshus company runs three hotels in lakeside resorts near Stockholm. They had been booked out throughout the year for conferences and events, but in March management mothballed two hotels and all restaurants after many reservations were canceled.
There are no free lunches in a catastrophe.
h/t GR