Sweden is exposed to the vagaries of global trade. Once the pandemic was unleashed, it was certain to suffer the economic consequences, said Mr. Kirkegaard, the economist.
“The Swedish manufacturing sector shut down when everyone else shut down because of the supply chain situation,” he said. “This was entirely predictable.”
What remained in the government’s sphere of influence was how many people would die.
“There is just no questioning and no willingness from the Swedish government to really change tack, until it’s too late,” Mr. Kirkegaard said. “Which is astonishing, given that it’s been clear for quite some time that the economic gains that they claim to have gotten from this are just nonexistent.”
Norway, on the other hand, was not only quick to impose an aggressive lockdown, but early to relax it as the virus slowed, and as the government ramped up testing. It is now expected to see a more rapid economic turnaround. Norway’s central bank predicts that its mainland economy — excluding the turbulent oil and gas sector — will contract by 3.9 percent this year. That amounts to a marked improvement over the 5.5 percent decline expected in the midst of the lockdown.
Sweden’s laissez faire approach does appear to have minimized the economic damage compared with its neighbors in the first three months of the year, according to an assessment by the International Monetary Fund. But that effect has worn off as the force of the pandemic has swept through the global economy, and as Swedish consumers have voluntarily curbed their shopping anyway.
Researchers at the University of Copenhagen gained access to credit data from Danske Bank, one of the largest in Scandinavia. They studied spending patterns from mid-March, when Denmark put the clamps on the economy, to early April. The pandemic prompted Danes to reduce their spending 29 percent in that period, the study concluded. During the same weeks, consumers in Sweden — where freedom reigned — reduced their spending 25 percent.
Strikingly, older people — those over 70 — reduced their spending more in Sweden than in Denmark, perhaps concerned that the business-as-usual circumstances made going out especially risky.