[ad_1]
The forecasts of the Swedish Central Bank, the Riksbank, point to a year 2020 much or more difficult economically than for other European countries, although this Nordic country has chosen not to implement such restrictive isolation policies.
Riksbank advances two possible scenarios. In the first scenario, gross domestic product (GDP) contracts 6.9% in 2020 and recovers in 2021, a year in which it is expected to show 4.6% growth. The second, more negative, points to a contraction in GDP of 9.7% and a recovery of only 1.7% in 2021.
The most optimistic scenario sees an increase in unemployment from the current 7.2% to 8.8%, but in the most pessimistic scenario, it reaches 10.1%. The achievement of one or the other depends on “how long the infection will continue to proliferate and how long the restrictions to stop it will remain,” CNBC cites.
In both scenarios, the contraction in the Swedish economy is “greater than that observed during the financial crisis.” The sharp drop in oil and electricity prices will also contribute to low inflation, the bank predicts, which it expects to remain at 0.6% under any circumstances.
Compared to their European peers who have implemented total isolation measures, such as Germany, France and the United Kingdom, the outlook is that these economies will decrease 6.5%, 7.2% and 7% this year, respectively. In the case of the countries of the South, most affected by the crisis, Spain expects a drop of 8% and Italy of 9.1%.
Sweden decided not to go ahead with “total isolation”. He advised citizens to work from home if possible, but restaurants and bars remained open, taking care to adopt a greater social distance. Schools for students under the age of 16 remained open. Still, Swedish supply chains and companies have suffered from the pandemic.
So far, the measures used to contain the economic impact have been the launch of a package of business loans and the extension of the bond purchase program, but interest rates have remained unchanged.
[ad_2]
