Press release from Ministry of Finance

Some signs of recovery in the economy – but situation still very serious

Published

The COVID-19 pandemic has had a serious impact on economic growth, both in Sweden and the rest of the world. GDP growth has been revised downwards compared with the assessment made in the Spring Fiscal Policy Bill. However, recently there have been some signs of recovery, albeit from a very low level and with great uncertainty. This is clear from the Ministry of Finance’s most recent economic forecast, presented today by Minister for Finance Magdalena Andersson.

The COVID-19 pandemic has had a serious impact on the global economy and led to historic declines in GDP all over the world. It is estimated that the recovery will take a long time.

In Sweden, GDP is expected to fall by 6 per cent this year. GDP growth was weak at 0.1 per cent (seasonally adjusted) during the first quarter, but there are indications of a more considerable decline in the second quarter.

“Compared with the most recent forecast in our Spring Fiscal Policy Bill, we have revised the growth forecast for Sweden downwards, but less than feared. We are now seeing some signs of recovery,” says Minister for Finance Magdalena Andersson.

The Swedish labour market has been greatly affected, with a continuing high number of redundancy notices as a result of the crisis. A considerable drop in demand has meant that the employment rate is expected to fall. Labour force participation is also declining, although considerably less. This means that unemployment is forecast to be 9.3 per cent this year.

The system of short-term lay-offs is expected to counter what would otherwise have been a larger drop in employment, as it enables businesses to hold onto staff to a greater extent.

The deep economic downturn that is expected in 2020 will lead to weakened public finances. The deficit is estimated to be SEK 371 billion this year, which is primarily due to the measures taken, but also due to the fact that tax revenues are lower as a result of reduced economic activity.

Press contact

Johan Ekström
Press Secretary to the Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 73 086 32 01
email to Johan Ekström
Mirjam Kontio
Press Secretary to the Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 73 074 05 57
email to Mirjam Kontio
Karine Raoufinia
Head of the Macroeconomic Forecasting Division
Phone +46 8 405 96 21
email to Karine Raoufinia, via senior registry clerk
Thomas Bergman
Head of the Division for Public Finances
Phone +46 8 405 47 18
email to Thomas Bergman, via senior registry clerk