Sweden sees first ‘positive signals’ for virus-hit economy

STOCKHOLM, Sweden – Sweden said on Thursday, June 18, that, following the downturn caused by the coronavirus, it is beginning to see the first positive signals and its economy will not contract by as much as initially expected this year.

Finance Minister Magdalena Andersson said the government now expected the Swedish economy to shrink by 6% in 2020, instead of by around 7% as projected in April.

“Lately we’ve seen some positive signals that suggest that we’ve reached the bottom and that we are now seeing a turn upwards,” Andersson told a press conference.

She stressed that the improvement had started from an unusually low level and there was still considerable uncertainty over the projections.

Noting that Sweden actually saw a slight gross domestic product (GDP) growth of 0.1% in the 1st quarter of the year, Andersson said there were indications of a significant drop in the 2nd quarter, and then a slight improvement in the 2nd half of 2020.

Most of the contraction in Sweden could be traced to lower investment, which Andersson said was understandable given the general uncertainty in the economy.

Despite signs of a turnaround, the government did not expect GDP to reach the same level as 2019 until 2022.

Sweden has pursued a softer approach to curbing the spread of the new virus and allowed many businesses to stay open as other countries have opted for strict lockdowns. 

But Sweden’s economy has taken a hit nonetheless, as it is heavily dependent on exports. – Rappler.com