Sweden: a less stringent lockdown has softened the economic blow

Chart of the week

As an increasing number of countries start returning to normal, April is set to be the month during which the various lockdown measures will have had the greatest impact on the economy. The PMI (1) indices, as the first available economic indicators, display very steep falls in countries that imposed stringent lockdowns. The eurozone composite PMI fell to 13.6, a very low figure and Sweden’s composite PMI has also fallen sharply, but only to 38.3.

Our analysis

Sweden adopted a dramatically different strategy to other countries in allowing schools and many businesses to remain open. In recent weeks, Oxford University’s Blavatnik School of Government has been publishing a Stringency Index that tracks the stringency of various countries’ lockdown measures. The index is calculated from several indicators (closures of schools, offices and shops, event cancellations, stay-at home rules and restrictions on movement) and measures stringency from 0 to 100. In April, it averaged 45 in Sweden versus 86 in the eurozone. For the sake of comparison, China’s stringency score was 60 in February and March and 49 in April.

While Sweden’s gentler lockdown has enabled economic activity to continue, its composite PMI index remains near to lows last seen at the start of 2009. At the time, GDP contracted by 5–6%. Sweden has not escaped a slowdown caused by the few restrictions that it did impose and the fact that its economy is very open. However, there is hope for a rapid return to near-normal activity levels (95%) when the strictest measures are relaxed. The remainder of the recovery will ultimately depend on multiple factors such as economic stimulus, whether production capacity has been preserved, and behavioural changes among economic agents.


See also :

United States: money creation at its highest since World War II


(1) The Purchasing Managers’ Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors.

The opinion expressed above is dated 6 May 2020 and is liable to change.


This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Frères Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Frères Gestion SAS. LAZARD FRERES GESTION – a simplified joint stock company with share capital of €14,487,500 – Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES – 75008 PARIS, FRANCE