April 23, 2020 / 8:07 AM / in a month

UPDATE 1-Sweden's economic sentiment plunges in April, worse than 2008-2009

* Overall confidence indicator down 33.9 pts to 58.6 pts

* Consumer confidence plunges to 73.9 pts, down 15.5 pts (Adds background, detail, NIER quote)

STOCKHOLM, April 23 (Reuters) - Confidence among Sweden’s businesses and households plunged by a record amount in April as the effect of the coronavirus outbreak hit businesses and households, a leading think tank said on Thursday.

The overall confidence indicator fell 33.9 points to 58.6 points in the month, the biggest monthly fall on record. Consumer confidence fell 15.5 points to 73.9 points, while manufacturing confidence fell 30.3 points to 70.5 points, the National Institute for Economic Research (NIER) said in a statement.

“Not even during the financial crisis was the fall in these confidence indicators as big during a single month,” the NIER, which is linked to Sweden’s Finance Ministry, said.

While Sweden has not gone into total lockdown, supply chain problems and measures to limit the spread of the novel coronavirus have forced companies to shutter their businesses and lay off thousands of staff.

The Swedish government reckons the economy will shrink around 4% this year, although Finance Minister Magdalena Andersson said that if the crisis is prolonged, the drop could be as much as 10%.

The government has launched a raft of measures to cushion the impact and head off a big surge in unemployment, including wage support, loans and guarantees for companies and extra money for local authorities.

The central bank has also poured money into the economy to stave off a liquidity crisis. (Reporting by Johan Ahlander; Editing by Simon Johnson and Jane Merriman)

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