Sweden was unable to escape its worst economic contraction ever despite adopting one of Europe’s softest approaches to the COVID-19 pandemic. Gross domestic product fell 8.6% in the second quarter, more than economists had forecast. But while that’s a record slump, it’s less severe than the slumps seen elsewhere in Europe. Spain, France and Italy all shrank by double digits and even Germany contracted by 10%.
Sweden’s GDP fell 8.2% when compared to the same quarter of last year, according to a first estimate from Statistics Sweden. Unlike its neighbours, Sweden refrained from imposing a mandatory lockdown, relying instead on voluntary public health guidelines. The strategy has coincided with a considerably higher mortality rate than in the rest of the Nordic region, and fresh research suggests it may not have succeeded in sustaining consumer spending.
Plummeting export demand has also been blamed for a sharp rise in unemployment in the country, despite a massive spending package from the government.