Swedes Pay the Price in Infections and Deaths

There is much debate about Sweden’s coronavirus strategy. 

The question is whether trying to spare the economy was worth allowing the virus to rip through the country. 

In any case, Sweden’s GDP tumbled 8.6% in the second quarter of the year, according to a flash estimate from the country’s statistics office on Wednesday – and recording its largest single quarterly drop in modern history. 

The record decline, broadly in line with consensus, was significantly worse than even the fourth quarter of 2008 when the Nordic country recorded a fall of 3.8% during the global financial crisis.

Robert Bergqvist (right), chief economist at SEB bank, told CNBC via email that considering Sweden’s stronger first quarter, Swedish GDP in the first half of the year had declined “only by around half as much as GDP in the euro area”. 

The euro zone’s economy contracted by 12.1% in the second quarter when compared to the previous quarter and by 11.9% across the broader European Union.

David Oxley (left), senior Europe economist at Capital Economics, also told CNBC that Sweden’s sharp GDP contraction “confirms that it has not been immune to Covid, despite the government’s well-documented light-touch lockdown”. 

In direct contrast to many countries across Europe, Sweden has kept most schools, particularly for younger children, and many businesses open in the wake of the coronavirus pandemic. 

Of course, the absence of a strict lockdown has coincided with the country recording more Covid-19 infections and related fatalities than all of its Nordic neighbors combined – Denmark, Finland, Iceland and Norway. 

Swedes must ask themselves if the price is worth paying.