International Value Chains Are Sweden’s Achilles Heel
Sweden faces a milder recession this year than many economies in the euro area, yet its high exposure to international value chains is its Achilles heel. Exports crashed almost 20% in the second quarter as shipments of investment goods fell and lower net exports explain more than a third of the decline in quarterly gross domestic product, according to Bloomberg Economics. The flip side of this heavy reliance on exports is that a global recovery will also have a substantial positive impact.
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