Sweden Raises Forecast for Economy as Recovery Starts to Pick Up
Sweden Raises Forecast for Economy as Recovery Starts to Pick Up
(Bloomberg) -- Sweden has raised its forecast for the economy amid signs of a recovery following the country’s softer lockdown approach.
Finance Minister Magdalena Andersson now expects GDP to contract by 6% this year compared to a previous forecast of about 7%.
“Lately, we have seen some positive signs, indicating that the economy may have bottomed,” Andersson said at press conference in Stockholm.
The government’s view chimes with that of many analysts and economists, who are expecting the outlier virus response to spare the Nordic region’s biggest economy from the worst of the fallout.
Earlier this week The National Institute for Economic Research in Sweden raised its 2020 GDP outlook for the country, following a similar move by SEB, which said consumer spending has suffered less than feared and even unemployment hasn’t spiked as much as elsewhere.
Andersson says “it’s too early” to assess whether Sweden’s strategy will mean a softer blow to the economy, but acknowledged “the decline in consumption in the beginning was less severe than in other countries.” She also said it may have been an effect of when the pandemic hit various countries.
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Others, such as the Dutch central bank, say the opposite is true: a light-touch lockdown will do more damage to the economy owing to the high number of sick people and plunging consumer confidence.
Sweden’s finance minister said the situation remains “serious” on Friday, and now sees unemployment increasing to 10.3% in 2021 compared to a previous forecast of 9%.
“The labor market is severely affected and we expect unemployment to continue rising,” Andersson said.
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