The fact that the contraction in Swedish GDP in Q2 was smaller than elsewhere in Europe understandably took the headlines this week. However, Sweden’s experience still demonstrates the extent to which social distancing can weigh on activity, even in the absence of legal restrictions, and pours cold water on hopes that services activity elsewhere will get back to ‘normal’ levels soon. Next week, the Q2 GDP indicator from Denmark, released on Friday, is likely to confirm that the Danish economy also fared comparatively well in Q2.
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