Sweden sees hope for its economy hit hard by pandemic

STOCKHOLM: Sweden said Thursday that, following the downturn caused by the coronavirus, it is beginning to see the first positive signals and its economy will not contract by as much as initially expected this year.

Finance Minister Magdalena Andersson said the government now expected the Swedish economy to shrink by six percent in 2020, instead of by around seven percent as projected in April.

"Lately we´ve seen some positive signals that suggest that we´ve reached the bottom and that we are now seeing a turn upwards," Andersson told a press conference.

She stressed that the improvement had started from an unusually low level and there was still considerable uncertainty over the projections.

Noting that Sweden actually saw a slight gross domestic product growth of 0.1 percent in the first quarter of the year, Andersson said there were indications of a significant drop in the second quarter, and then a slight improvement in the second half of 2020.

Most of the contraction in Sweden could be traced to lower investment, which Andersson said was understandable given the general uncertainty in the economy.

Despite signs of a turnaround, the government did not expect GDP to reach the same level as 2019 until 2022.

Sweden has pursued a softer approach to curbing the spread of the new virus and allowed many businesses to stay open as other countries have opted for strict lockdowns.

But Sweden´s economy has taken a hit nonetheless, as it is heavily dependent on exports.