Sweden’s Coronavirus Approach Doesn’t Pay Off for the Economy

(Bloomberg) -- Sweden and Norway took very different approaches to controlling Covid-19, with the latter swiftly adopting strict lockdown controls and ramping up testing, while the former attempted to combat the virus by using mainly voluntary, non-regulatory social distancing measures.

Yet Sweden’s strategy hasn’t paid a clear dividend in supporting growth: The economy took a lesser hit than most in the first quarter, but monthly GDP-data and daily activity indexes show growth has been slow to recover after that. Meanwhile, with cases under control Norway was able to relax controls and activity has rebounded rather strongly.

The peak-to-trough drop in activity in both countries was similar, though a Bloomberg Economics’ estimate on what portion of the drop came from lockdown policies as opposed to other factors depressing growth shows a balance of the two in Norway, while voluntary changes in behavior and weak global demand played a dominant role in Sweden.

• Read the full research: GLOBAL INSIGHT: What Sweden Can Teach Trump on Lockdowns, Growth

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