2020-05-04
Outlook april 2020
Updated economic outlook
Developments in April suggest that the COVID-19 pandemic will hit the Swedish economy much harder than anticipated in The Swedish Economy, April 2020. The global economy is faring worse than expected, which is affecting Swedish exporters also battling with disruption in international supply chains.
The NIER’s business and consumer confidence indicators fell in April to new lows and point to a rapid and severe downturn, not least in large parts of the service sector. This picture is supported by the Agency for Economic and Regional Growth having received applications under the short-time work programme for more than 350,000 employees in recent weeks. Together with the government’s other support measures, this will slow the rise in unemployment. In the NIERs updated base scenario, GDP drops 7 per cent this year, and the support measures cause general government net lending to fall to -6 per cent of GDP. Sweden’s relatively low Maastricht debt means that there is nevertheless considerable scope to step up the support measures in order to limit the economic downturn and promote the subsequent recovery, should this be deemed necessary.
2019 | 2020 | diff | 2021 | diff | |
|---|---|---|---|---|---|
Global GDP | 2.9 | –3.0 | –2.2 | 5.8 | 1.4 |
GDP Sweden, Market Prices | 1.2 | –7.0 | –3.9 | 4.8 | 1.3 |
Employment | 0.7 | –3.7 | –2.1 | –0.3 | –0.4 |
Unemployment Rate 1 | 6.8 | 10.2 | 1.5 | 11.0 | 2.1 |
Hourly Earnings 2 | 3.9 | 5.1 | 2.8 | –0.4 | –2.6 |
CPI | 1.8 | 0.6 | 0.1 | 1.5 | 0.2 |
CPIF | 1.7 | 0.5 | 0.1 | 1.5 | 0.2 |
Repo Rate 3,4 | –0.3 | 0.0 | 0.0 | 0.0 | 0.0 |
Government Net Lending 5 | 0.4 | –6.3 | –2.7 | –3.2 | –1.3 |
Maastricht Debt 5 | 35.1 | 44.7 | 3.8 | 44.2 | 4.5 |
1 Per cent of labour force. 2 According to the national accounts, for the business sector. 3 Per cent. 4 At year-end. 5 Per cent of GDP.
Note. Hourly earnings according to the national accounts is greatly affected by the short-time work scheme in 2020 and 2021, see The Swedish Economy, April 2020.
Note. The difference refers to the difference between the current base scenario and the base scenario in The Swedish Economy, April 2020. A positive value means an upward revision.
Sources: Statistics Sweden and NIER.
