Hit by the epidemic, Sweden now sees ‘positive signs’ for its economy
Stockholm: Sweden said on Thursday that, after the recession caused by coronovirus, it is seeing its first positive sign and that its economy will not contract as expected earlier this year.
Finance Minister Magdalena Andersen said the government expects the Swedish economy to shrink to six percent in 2020, rather than six percent in April.
“Recently we have seen some positive signs that suggest that we have reached the bottom and now we are seeing a turn,” Anderson said at a press conference.
He stressed that the reform had started from abnormally low levels and there was still a lot of uncertainty over estimates.
Noting that Sweden actually saw a slight GDP growth of 0.1 percent in the first quarter of the year, Anderson said there were signs of significant decline in the second quarter, and then a slight improvement in the second half of 2020.
Much of the contraction in Sweden can be traced back to underinvestment, which Anderson said could explain the general uncertainty in the economy.
Despite signs of a turnaround, the government did not expect GDP to reach the same level by 2019.
Sweden has adopted a softer approach to stop the spread of the new virus and has allowed many businesses to remain open as other countries have opted for strict lockdowns.
But Sweden’s economy has nonetheless taken a hit, as it relies heavily on exports.