Sweden’s highly contested response to Covid-19 left much of the economy open. Even so, the country is now headed for its worst recession since World War II, Report says citing Bloomberg.
Scandinavia’s biggest economy will shrink 7% this year, Finance Minister Magdalena Andersson said on Tuesday. Shortly after she spoke, the debt office revealed a historic 30-fold spike in borrowing to cover emergency spending amid record job losses. A separate survey showed 40% of businesses in Sweden’s service sector now fear bankruptcy.
There’s been intense speculation over Sweden’s controversial model for fighting the spread of the coronavirus. Though the country has seen considerably more COVID-19 deaths than its Nordic neighbors, some theorized it might at least suffer less economic pain. But the latest data challenge that idea.
Andersson said her country is now seeing “a profound economic crisis.” She also said the “deep downturn in the economy is happening faster than we expected.”
Sweden has left shops, restaurants, gyms, and schools open throughout the pandemic while encouraging citizens to use common sense and observe distancing guidelines.
About half Sweden’s GDP comes from exports, and some of its best-known companies, such as Volvo Cars and Electrolux, have had to cut thousands of jobs as demand dries up.
Spain records the third-highest Covid-19 infection level, with 278,803 cases, 27,778 deaths.