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Swedish economy grew in first quarter

Only Western European nation not to impose lockdown reaps the benefits

Swedish

Sweden saw its economy grow in the first three months of the year, according to data published on Friday.

The Nordic nation’s statistics office reported gross domestic product (GDP) growth in the first three months of the year of 0.4 per cent, at an annualised rate. When seasonally adjusted and compared with the previous quarter, Swedish GDP increased by 0.1 per cent.

Although in normal circumstances, such meagre economic expansion would trigger worry and headlines about economic weakness, the latest figures have been celebrated in the post-coronavirus outbreak world.

Sweden was the only Western European nation not to impose a full-scale lockdown to limit the spread of Covid-19, instead pursuing a policy of herd immunity while recommending increased levels of hygiene.

Through this controversial and lone stand the Swedish government hoped not to sabotage the nation’s economy on the basis of preliminary epidemiological models of a virus few fully understand to this day.

With over 36,000 Covid-19 cases and 4,350 deaths, Sweden has fared worse than its four largest Scandinavian neighbours combined. However, it should be noted that Sweden has the largest population. Furthermore, Dr Anders Tegnell, the country’s chief epidemiologist, has argued that other nations will catch up as their populations will not have developed herd immunity.

The latest GDP figures come as a surprise for many analysts and economists, who on average predicted a 0.6 per cent contraction on a quarterly basis in a recent Reuters poll.

Nonetheless, although Sweden may succeed in blunting the economic impact of the Covid-19 crisis, few believe that the nation will be able to escape the effect of the major economic depression now weighing on Europe as a whole. The European Commission is expecting the European Union’s growth rate to contract by 7.4 per cent in 2020.

Considering this dour outlook, rather than rejoicing at the latest GDP data, the OMX Stockholm 30 Index stands down 1.43 per cent at 1,633.33 in Friday mid-afternoon trading.

FURTHER READING: Renault to cut almost 15,000 jobs in bid to save €2bn in costs

FURTHER READING: German retail sales fall much less than forecasted in April

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