STOCKHOLM (BLOOMBERG) - Sweden will adjust a key corner of its strategy for dealing with Covid-19 after the death rate at care homes spiralled out of control.

The government of Prime Minister Stefan Lofven plans to spend about 2.2 billion kronor (S$312 million) on ratcheting up staff levels to help protect the country's oldest citizens. Another two billion kronor will go towards compensating local authorities for the extra costs they have incurred in dealing with the pandemic, the government said on Tuesday (May 12).

Like elsewhere, Sweden's Covid-1- related deaths have disproportionately hit the elderly. But critics argue that many of those fatalities could have been avoided if the authorities had taken more steps to focus attention on the most vulnerable demographic.

Earlier this month, Sweden said prosecutors had started an investigation into the high death rate at a care home. Half of those over 70 years old who have died from Covid-19 in Sweden lived in nursing homes, according to national statistics at the end of April. As of Monday, the country had registered 3,256 Covid-19 related deaths.

Sweden's approach to handling the coronavirus pandemic has become a topic of international debate after it opted for a more lax lockdown, and instead relied on its citizens to follow social distancing guidelines.

Swedish gyms, schools, restaurants and shops have all remained open throughout the spread of the pandemic. The strategy has so far helped shield the economy from the worst, but Sweden's death rate is about 32 per 100,000, compared with 24 in the US and roughly nine in neighbouring Denmark.

Sweden's top epidemiologist, Dr Anders Tegnell, says fighting Covid-19 is a long-term undertaking, meaning temporary lockdowns will ultimately backfire. He says once they are lifted, infection rates will again rise.

Instead, Dr Tegnell says moderate restrictions that allow much of normal life to continue are more likely to help guide a society through a pandemic that has a protracted lifespan.

But the strategy remains controversial. Within the Nordic region, contrasts have been drawn between Sweden and Denmark, which opted for a strict lockdown early on.

Denmark is now in the second phase of reopening its economy. What's more, recent data even suggests its infection rate is falling, and its death rate so far is less than a third of Sweden's.

Denmark opened large swathes of its economy in mid-April, including primary schools and hairdressing salons. This week, Danish shops opened for the first time in two months, with museums and cinemas set to follow.