Sweden Warns of Covid Hit to Economy After ‘Unprecedented’ Curbs
Sweden Says Covid Resurgence Will Hurt Economy in Months Ahead
(Bloomberg) -- Sweden’s government has acknowledged that the latest Covid-19 flare-up means the economy will be weaker over the coming months than previously thought.
Finance Minister Magdalena Andersson said the pandemic is now “just as serious” in Sweden as it was back in March and April. “The transmission we have seen recently, and the measures taken here and in other countries, are expected to dampen the economic recovery,” she said at a press briefing on Wednesday.
Sweden has so far faced a milder recession than many other European nations, after leaving much of its economy open throughout the pandemic. But with new cases soaring and hospitals filling up as Europe enters winter, the outlook is now much bleaker.
On Wednesday, Sweden reported 96 deaths due to Covid-19, and fatalities are now at a level not seen in the country since June.
The number of Covid patients in Sweden’s intensive-care units has doubled over the past 13 days. The overall level remains well below a peak in April, but the development has triggered dire warnings from the government that Sweden is now facing a “really dark” winter.
Sweden has so far relied on mostly voluntary measures to encourage social distancing. But this week, it took the “unprecedented” step of banning public gatherings of more than eight people, in an effort to fight the virus. And Prime Minister Stefan Lofven has urged Swedes to “cancel” any social activity that might fan infection rates.
The stricter measures, while needed to fight the virus, are likely to dent economic growth, Andersson said. But she also noted that the rebound seen during the summer months was stronger than expected, meaning it’s not yet clear how much full-year forecasts will need to be adjusted. The Finance Ministry’s latest estimate for 2020 points to a 4.6% contraction.
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