Sweden Says Covid Strategy Was Never About Shielding the Economy

(Bloomberg) --

Sweden’s finance minister says it was never the government’s intention to adopt a relaxed Covid-19 strategy in order to protect the economy.

Speaking in an interview in Stockholm, Finance Minister Magdalena Andersson said, “We haven’t taken economic considerations when we have decided on the Swedish strategy.”

Sweden’s softer lockdown has resulted in one of the world’s highest death rates, relative to the population. At the same time, Andersson said in May that her country was facing a “very deep economic crisis,” with GDP set to sink about about 7%, despite the softer lockdown.

The decisions taken in Sweden have fed into a global debate over the economic consequences of shuttering a society to fight a pandemic. Some analysts have argued that Sweden’s economy is likely to fare better, while others suggest the opposite is true. The data so far have been mixed.

Andersson said her recent prediction that Sweden is now facing its worst recession since World War II still holds. But she also said there are “quite a few indications of an upturn, from a very low level,” and “consumption has dropped less in Sweden than in other countries.”

Even so, Sweden’s recession is likely to be roughly as bad as that in the European Union, which estimates an average GDP decline of 7.4% this year.

“Uncertainty remains high and unemployment is likely to continue increasing,” Andersson said.

Sweden’s Covid-19 strategy has also plunged the country into a political crisis. Last week, the chief epidemiologist admitted he’d made mistakes and that he’d probably have advised a somewhat broader lockdown with the benefit of hindsight. But he and Prime Minister Stefan Lofven have both pledged to stick with the current strategy.

A poll last week showed that Swedes’ confidence in their government’s handling of the crisis has plunged by almost 20 percentage points to less than half the population. Key members of the opposition in parliament have started demanding consequences, and accused Lofven of mishandling the situation.

For now, Swedish authorities are hoping that their strategy, which is designed to be more sustainable than sudden and severe lockdowns, will bear fruit in the long run.

“We have listened to our experts and their assessment of what is the most effective long term to curb the pandemic,” Andersson said.

©2020 Bloomberg L.P.