Sweden’s COVID-19 response hasn’t saved economy

New research has thrown a cold blanket over claims that Sweden’s lax response to COVID-19 has saved its economy:

Sweden’s “light-touch approach” to curtailing the spread of Covid-19 has produced only limited economic benefits, according to research that compared spending patterns in the Scandinavian country and in Denmark, where far more restrictive policies were adopted.

Unlike elsewhere in Europe, Sweden did not go into lockdown, keeping shops, schools and restaurants open and relying on voluntary social distancing instead. While the strategy has resulted in a much higher mortality rate, researchers at the University of Copenhagen found that consumer spending in Sweden fell only 4 percentage points less than in neighboring Denmark — 25% compared to 29%.

According to Adam Sheridan, one of the authors of the study, the relatively small difference is likely due to consumers in Sweden independently deciding to restrict spending out of health concerns.

The findings suggest that consumer spending “will drop even absent a government intervention,” Sheridan said…

“If you accept that the difference in mortality in Sweden and Denmark is caused by the different policy choices, then our findings suggest that you actually don’t lose that much extra spending for each extra life you save,” Sheridan said.

Sweden has suffered a higher mortality rate than its neighbors, with the number of deaths attributable to Covid-19 stands at 5,747 in Sweden and 616 in Denmark, according to latest official data.

The European Union is forecasting similar drops in gross domestic product for Sweden and, Denmark this year.

A quick glance at Sweden’s and Denmark’s GDP results supports these claims:

Meanwhile, Sweden’s statistics office has recorded the nation’s highest first half death rate in 150 years:

The office said COVID-19 claimed about 4500 lives between January and June, bringing the total number of Swedish deaths for the six-month period to 51,405.

The last time so many Swedes died was in 1869 during the famine. In total, there were 55,431 deaths that year.

The population of Sweden was about 4.1 million then, compared to 10.3 million now.

In June, authorities in the Scandinavian country conceded they should have done more to combat the coronavirus and prevent a much higher death rate.

The coronavirus has claimed a further 1300 people since the end of June, bringing the total number of COVID-19 fatalities to about 5800…

COVID-19 meant that deaths were 10 per cent higher than the average for the period over the last five years, the Statistics Office said.

In April the number of deaths was almost 40 per cent higher than average due to a surge in COVID-related fatalities.

So far Sweden has killed ten times as many of its citizens as neighbouring nations to no purpose.

To be fair, this virus has yet to fully play out across the globe. Herd immunity might work or be rendered moot by vaccines and/or mutations.

Thus, we will not get the full picture on whether Sweden’s strategy was successful until the pandemic has fully run its course.

Unconventional Economist
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