The pandemic resulted in significant costs in the form of lost value added in 2020 and 2021. Lost value added, measured as a decline in GDP, however, is not a complete measure of the welfare loss during the pandemic. Firstly, GDP is limited to losses of current value added, and not losses in later periods. Future losses can be significant, e.g. if many drop out of the labor market. Secondly, GDP is limited to losses related to economic activity. It does not say anything about costs such as loss of life and health from Covid-19, nor does it say anything about health or quality of life effects from infection control measures. Lost value added nevertheless captures important dimensions of the economic costs of Covid-19 and can be a starting point for a more comprehensive assessment.

This report was initially published April 14th, 2021. At that time, we considered the macroeconomic outturns through 2020. Later we have updated the report to include figures and analysis up to and including the 3rd quarter of 2021. With these periods included we have better insight into economic developments after the initial shock in the 2nd quarter of 2020. The 1st quarter of 2021 was marked by increasing infection rates and new restrictions, while the 2nd and 3rd quarter showed recovery in Scandinavia as the virus came under control and society reopened. In this updated report some figures for 2020 have been revised, which partly alters the initial analysis. Of note, the revised figures indicate that Denmark’s economy declined the least in 2020, while previous figures indicated Sweden’s economy had the least downturn.

A key find in the previous report was that the Scandinavian economies were quite similarly impacted by the pandemic, independent of infection control strategies. We thus found that the effect of different measures was of less importance compared with the consequences the pandemic triggered regardless. Broadly speaking, this conclusion has not changed. National Accounts figures for 2020 for Mainland Norway, Sweden and Denmark all show an annual decline between 2-3 per cent. By the 3rd quarter of 2021 all three countries had recovered to a level around 2 per cent higher than before the pandemic. We find some differences when looking at detailed industries and the course of the pandemic, which might be caused by different strategies for handling the pandemic and differences in the economic structure of the three countries. Economic developments in Scandinavia are, however, strikingly similar throughout the pandemic, in comparison with other countries.

This report does not provide a full picture of the impact of Covid-19, since the pandemic was still ongoing by the end of the 3rd quarter of 2021. Nevertheless, we believe that the data available thus far give sufficient ground for drawing preliminary conclusions about the economic consequences of different strategies.

It should be noted that this report was submitted to the Corona Commission on January 15th, 2022. The report uses figures from Denmark, Sweden and Norway’s National statistical databases as they were upon publication of the National Accounts for the 3rd quarter of 2021. These figures are preliminary and might be revised.