KI now presents a new revised forecast on the effects of corona pandemic. Developments have been extremely fast, and the negative effects are hitting the Swedish and global economy harder than predicted just a couple of weeks ago.

This means that assumptions are now being made that the government will come up with further crisis packages, among other things, the government is expected to extend the state's sick pay responsibility until September. In the same way, the retrenchment deduction is judged to be delayed for a longer period.

Rapid decline

In addition, the government is expected to provide additional support to companies, SEK 50 billion, and even more money, SEK 20 billion, to municipalities and regions, according to KI. So far, the government has presented crisis measures that cost the Treasury over SEK 100 billion.

-There is a very rapid decline in the economy and deterioration of public finances. It is always difficult to make forecasts but right now it is even harder. Our assessment is that the risks dominate on the downside, says KI's unit manager Erik Spector at a press conference.

GDP falls in the National Institute of Economic Research's updated base scenario by 7 percent this year and unemployment rises to just over ten percent.

-We've seen record highs. In individual months, it is significantly higher than during the financial crisis, ”says Erik Spector.

-We have seen a very rapid slowdown in the global economy. This, of course, strikes against Swedish exports, which fall sharply in the second quarter. There is a broad downturn in the economy.

Even worse

However, next year it will be even worse, according to KI's base scenario. Then unemployment rises to eleven percent, but Sweden's GDP then recovers with a lift of 4 percent.

The government deficit is projected to reach 6.3 per cent of GDP this year and be 3.2 per cent next year.

But the government debt is initially low and there is a large scope to increase support for the economy, according to KI.

This article will be updated.