2020-08-21
Outlook August 2020
Updated economic outlook
According to Statistics Sweden’s GDP indicator, output fell 8.6 per cent in the second quarter. This dramatic decrease was expected and is largely in line with our June forecast.
The COVID-19 pandemic has hit large parts of the business sector hard, but there are now signs that demand and production are gradually beginning to pick up again. Many of the drastic lockdown measures in the euro area and elsewhere of April and May have been relaxed recently, which will benefit Swedish exporters.
Domestically, the extensive government support packages for business and employment have helped curb the rise in unemployment. In line with our June forecast, we expect GDP to grow by almost 2 per cent per quarter in the second half of this year, but the economy will still find itself in a particularly deep downturn next year. Firms will therefore continue to cut their workforce, and unemployment will climb to 10 per cent during the winter.
2019 | 2020 | diff | 2021 | diff | |
|---|---|---|---|---|---|
GDP, market prices | 1.2 | –4.8 | 0.6 | 3.4 | –0.1 |
Employment | 0.7 | -1.9 | 0.0 | -0.6 | 0.0 |
Unemployment (1) | 6.8 | 8.5 | 0.0 | 9.5 | 0.0 |
Hourly earnings (2) | 2.6 | 1.8 | 0.0 | 2.2 | 0.0 |
CPI | 1.8 | 0.5 | 0.1 | 1.1 | 0.0 |
CPIF | 1.7 | 0.5 | 0.1 | 1.1 | 0.0 |
Repo rate (3,4) | -0.3 | 0.0 | 0.0 | 0.0 | 0.0 |
Government net lending (5) | 0.3 | -4.6 | 1.0 | -3.4 | 0.2 |
Maastricht debt (5) | 35.2 | 42.7 | -1.4 | 45.0 | -1.5 |
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.
Sources: Statistics Sweden and NIER.
