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Analysis: Coronavirus crisis may cost the economy several hundred billion Swedish kronor

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The drop in consumption during the coronavirus pandemic is hitting many industries hard along the supply chains. An analysis carried out by Statistics Sweden shows that the effects of the pandemic can be measured in hundreds of thousands of jobs and several hundred billion Swedish kronor during 2020 alone.

The coronavirus crisis is expected to lead to decreased demand in Sweden with regard to both private consumption and exports. It affects not only the automotive industry, hotels, restaurants and the travel industry. Industries further down the supply chains are also affected, which can further impact both the economy and the climate.

According to forecasts from 1 April and 29 April published by the National Institute of Economic Research, the decrease in demand in 2020 will amount to the equivalent of SEK 400 billion. Using these forecasts and own data, Statistics Sweden has carried out an “input-output” analysis of the effects on GDP, employment and greenhouse gas emissions.

Put simply, a model is used to describe how industries are connected and the gross production in one industry constitutes the input in other industries. This makes it possible to see how a change in demand both directly and indirectly affects various industries in the economy. The direct effect then refers to how the directly hit industries, such as hotels and restaurants, are affected. The indirect effect refers to how all other industries in the economy are affected by being part of supply chains to the directly affected industries.

The analysis builds on material that is constantly changing and should be interpreted with caution, but it clearly shows how problems in individual industries can have major effects on the entire economy.

Drop in employment

According to Statistics Sweden’s analysis, a drop in demand will have the following direct and indirect effects on GDP, employment, and greenhouse gas emissions in 2020:

  GDP Employed persons Greenhouse gases
Direct effect -200 billion -225 000 -2.0 megatonnes
Indirect effect -110 billion -110 000 -1.9 megatonnes
Total effect -310 billion -335 000 -3.9 megatonnes

The indirect effect is that GDP narrows by an additional SEK 110 billion and that the number of employed persons decreased by a further 110 000. At the same time, the drop in demand is expected to have positive effects on the climate, as greenhouse gas emissions are expected to decrease by 3.9 megatonnes in total. According to the analysis, the indirect climate effect is almost at large as the direct effect.

Industries variously sensitive

Different industries are variously sensitive in a general downturn in the economy. If the final demand on goods and services decreases by SEK 1 million in all industries, this has the greatest impact on security and real estate services, and the office services industry with regard to employment, both directly and indirectly. Employment is expected to decrease there by 2.68 persons for every SEK 1 million in decrease.

The refinement industry is least sensitive and employment is only expected to decrease there by 0.05 persons per SEK 1 million.
However, in absolute numbers, the health and social care industry, which includes elderly care, is worst affected. If final demand drops by one percent in all industries, this will lead to around 4 800 fewer employed persons in that industry.

Facts: Statistics Sweden’s input-output analysis

This article is based on an input-output analysis of the Swedish economy.

The input-output tables describe how the various industries are connected and the gross production in one industry constitutes the input in other industries, and how a change in demand affects various industries in the economy.

The input-output calculations are based on the National Accounts connections. In this analysis, value added, employment and greenhouse gases are included per industry.

Data from the 2017 input-output tables has been used for a projection, in part with the help of quarterly statistics from Statistics Sweden up to and including 2019, and in part with the help of the forecast database at the National Institute for Economic Research up to and including 2020.

In this analysis, employed persons refers to the number of persons based on an estimated average annual working time in 2020 of 1 700 hours per full-time employee. This means that the number of employed persons in the analysis does not include short-term layoffs (which means that a person does not work but remains employed).


National Accounts, input-output tables, employment, and value added

Environmental accounts, greenhouse gases

National Institute of Economic Research forecast database (in Swedish)


Johannes Cleris, Press officer

+46 72 084 40 83

Mårten Berglund

+46 10 479 43 13