COVID’s impact on Sweden’s economy

COVID’s impact on Sweden’s economy

Sweden is one of those countries that took a huge gamble when it came to the novel coronavirus pandemic. While almost everyone else started locking down their economies and hiding behind closed doors at home Sweden embraced the freedom and tried a totally mind-boggling method of dealing with the situation.

The country is notorious for its open economy even during the worst moments of the pandemic. The health experts as well as the government agreed between each other that the damage that would be done to the country’s economy would outlast and outpace the damage that Covid-19 would do to the population. With responsibility falling into the hands of the citizens who were instructed to keep distance between each other, wear masks, and take care of hygiene as much as possible.

How Does Sweden Compare to Other Countries?

The response from the international community, as well as the public, has been mixed at best though. There were moments where the European countries were already coming out of the bulk of the Covid-19 infection and the rates were flattening while Sweden was still having major issues. However, when the statistics of the economies that took hits due to these strict lockdowns came out things were put in a totally different perspective. Even the strongest economies across the world have suffered immensely with the US reporting as much as 33% annual shrinking of the economy while others like the UK followed suit with a record rate of 20%. At the very same time, the Swedish Ministry of Finance reported “only” 8.6% in the April to June period over the previous three months.

The lockdowns themselves are a mixed basket. While in the US it is debated how well President Donald Trump’s administration handled the crisis they still imposed very strict social distancing laws. However, this did not help to quell the number of infected. The US is heartbreakingly leading the race with almost 6.5 million infected and 192,000 deaths. It is closely followed by India with 4.6 million infected and Brazil with 4.2 million. Sweden on the other hand is sitting firmly on 38th spot having 86,000 infected and 5,800 deceased. Strongly outpacing countries with serious lockdowns like the UK (358,000), France (353,900), Spain (554,000), and even Germany (258,769).

Most of the countries which we have mentioned have very robust healthcare systems with top of the line hospitals and the world’s best doctors at hand. So the issue is not in the hospitals and overall treatment methods but with the people who have shown to be more or sometimes less responsible with the virus hence the different numbers across countries with similar demographics.

People Started Looking For Extra Income

The businesses were still being shut down in Sweden though. It is not like the country did not take any precautions. The tourism industry as well as airlines still suffered massive losses across the world including in Sweden. Even though inner-tourism has managed to pull through it still didn’t prove to be enough. A number of Swedish citizens decided to isolate themselves to stand better chances without infection. The unemployment rate has increased to 8.9% in comparison to the usual 6 to 7%. This means a good number of people still lost their jobs and livelihoods. However, it is worth noting that it does not mean that they are dying of hunger.

There are a number of stimulus packages from the government as well as other options that people started investing their spare funds in. It is worth noting that statistically, the foreign exchange market (Forex, FX) has become much more popular across the whole of Sweden. The whole country boasts a well regulated financial market and has a good number of Top Sweden FX brokers that provide a very high-quality service to their customers. This is a major plus for a multitude of reasons. For example, many of the developing countries outside of the EU do not have the opportunity or even regulation to ensure safe trading and thus have to go through major hoops to achieve this goal. Forex trading is on the rise everywhere but it’s just that much easier for countries where the existing infrastructure already allows a citizen to enter the market in a much simpler way without worrying about scammers left and right.

Did Swedish Strategy Work During The Pandemic?

As we have already mentioned Sweden was one of the countries that relied on public volunteering to take precautions. Working from home where possible and general avoidance of public transports and places where people gather in mass. The businesses were largely left open and did not face issues internally from their governments and regulators. However, the country is still very much dependent on international trade. The exports were hit hard due to other countries closing their borders to even foreign products. Due to this, the demand for supplies from abroad has fallen by a huge margin and thus the economy also suffered.

Although it is worth noting that the government authorities have always been stating that the Swedish Covid-19 strategy was not meant to save the economy but rather create a sustainable, long-term measure that would comfortably last until the vaccines are ready to be rolled out. The Swedish government was always determined to minimize the impact of the novel coronavirus on society by limiting the job losses as well as the overall impact on the business but it was never the main focus.

Other than that, it is important to understand that, although not actively discouraged, a good number Swedes across the country still chose to stay far away from the stores and other public spaces that were left open because of what they saw on global media outlets with countries like Italy, France, Spain, UK, and the US that had high coronavirus rates. Unfortunately, there is no winning with the strategy at this point and time. The question still stands: just how many deaths are acceptable? The answer is obvious but reality does not work like that. Even in countries with strict lockdowns, there were a good number of people who have lost their lives. The Swedish population has endured a number of deaths already due to open doors policy of the government and polls show that some minorities are already popping up being vocal and criticizing the strategy. Even though the economy is faring better than others, it still took a major hit and a 5% economic shrink is never a good sign.


Updated September 13, 2020

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