The Covid-19 pandemic is hitting the Swedish economy hard, predicts the National Institute of Economic Research in its new report, which was presented on Wednesday.
In the second quarter of this year, the GDP fall will be just over 6 percent, according to KI. At the same time, they point out how difficult it is to make accurate forecasts in the current situation.
- We have no regular forecast, it is so difficult. The development is running away from us all the time so we have done a basic scenario, says Ylva Hedén Westerdahl, forecast manager at KI, at a press conference.
In the assumed base scenario that KI painted up, 20 per cent of all employed persons can be assumed to be sick on average for two weeks during the spring, which means that 85,000 fewer work. 100,000 people will, on average, be short-term permits during the period April to December. During the third quarter of this year, KI expects that people's social lives will return to normal.
Consumption falls deepKI expects that the handling of the coronap virus will result in a budget deficit of 3.5 percent of GDP this year, raising the central government debt to almost 41 percent of GDP.
Household consumption will fall deep this year, a stronger fall than during the financial crisis, KI predicts.
- We see significantly fewer restaurant visits and travel bookings, says Hedén Westerdahl.
At the same time, KI believes that the recovery after the corona crisis will result in 3.5 percent growth in 2021, but that the recession will continue. KI also recommends that the Riksbank lower the interest rate.