Svante Öberg: The current economic situation
Speech by Mr Svante Öberg, First Deputy Governor of the Sveriges Riksbank, at Kulturens
hus, Luleå, 18 August 2009.
* * *
It gives me particular pleasure to come to Luleå to talk about the economic situation. This is
because my father, Folke Öberg, was born and raised in Luleå and he began working at the
Riksbank here in 1930. This is also where he met my mother, Margareta. In the 1930s they
moved to Stockholm, where my father began working at the Riksbank's head office, where
he was employed until his retirement in 1972. The local offices that the Riksbank previously
had in each county, including here in Luleå, have long been closed down and activities are
now concentrated in Stockholm.
What I intend to say here today can be summarised in three points:
•
The deep recession has hit bottom, but the recovery will be weak.
•
New information received over the summer tends to indicate a slightly stronger GDP
growth than we have forecast, but the labour market is continuing to weaken and
inflation is low.
•
Monetary policy is aimed at dampening the economic downturn. The repo rate was
cut to an all-time low of 0.25 per cent in July and is expected to remain at this low
level for the coming year.
In my speech today I will present the Riksbank's assessment of economic developments
both in Sweden and abroad. This is the assessment that was described in the Monetary
Policy Report published on 2 July this year. I will also comment on the new information
received over the summer. Finally, I shall report how the majority of Executive Board
members and I personally viewed monetary policy in July. But I shall began by describing
developments in the financial markets, which are both the reason for the economic downturn
being so severe and a necessary condition for growth to pick up again.
Financial markets
Improved situation in the financial markets
The situation in the financial markets has improved over the past six months both in Sweden
and abroad. Risk premiums in the interbank market, for instance the TED and basis spreads,
have fallen and are now close to the levels prevailing prior to the outbreak of the crisis two
years ago (see Figure 1). This is a sign that the interbank market is functioning better. Other
positive signs that the situation in the financial sector has stabilised are that Swedish
companies can once again take loans in the international capital market, that equity prices
have risen and that the krona has strengthened.
However, the problems in the financial sector are not over yet. Several other types of risk
premium are still at higher levels than prior to the crisis, for instance, credit spreads for
companies and Credit Default Swaps. Moreover, the banks' loan losses will probably
increase (see Figure 2).1
The financial crisis has so far been less serious in Sweden than in many other countries. The
Swedish banks are well capitalised. But they are also to a large degree dependent on the
securities markets for their funding and they have expanded substantially in the Baltic
countries. The greatest risk for Sweden therefore lies with the banks' credit exposure to the
Baltic countries.
International developments
Slow global recovery
Over the past year, the global economy has been hit by the most rapid economic downturn
since the Second World War. Economic developments abroad are very weak this year and
much weaker than we had previously anticipated. Since September last year, the Riksbank
has gradually revised down its forecasts for global GDP growth in 2009 from approximately 4
per cent to around -1 per cent (see Figure 3). The forecasts in the most recent Monetary
Policy Report are no exception, but for the first time they only involve a minor downward
adjustment.
There are numerous indications that the severe economic downturn has now touched
bottom. During the spring there were increasing signs pointing to a slowdown in the heavy
fall in world GDP. At the same time the financial markets have begun to function more
efficiently, which is an important condition for ensuring that the economic recovery will begin.
World trade has also begun to show signs of stabilisation during the spring, after the earlier
heavy fall in exports. But our assessment is that the recovery will be a slow one (see Figure
4).
The view that a recovery in the world economy has begun is also confirmed by the IMF's
most recent forecasts for global developments. However, the IMF report also depicts the
recovery as being sluggish.2
Inflation abroad has continued to fall and has been negative in recent months, but underlying
inflation has been more stable. I shall return to this point.
Nevertheless, commodity prices have begun to rise. The oil price fell substantially last year,
but has now risen again to around USD 75 per barrel, and according to forward rates it is
expected to rise slightly during the forecast period (see Figure 5). The price rise may be a
consequence of the expectation that demand will increase, but oil stocks are large and the
OPEC countries have good capacity to increase their production, which should have a
restraining effect on the oil price. Other commodity prices - metals, foods and other
agricultural products - have also risen in recent months (see Figure 6).
USA
The United States is currently suffering its most prolonged recession since the 1940s. It
started back in December 2007. According to our most recent forecast, the US economy will
shrink by an average of around 3 per cent in 2009. Growth is expected to be positive again
with effect from next year. Since the monetary policy meeting in July the national accounts
figures for the second quarter of this year have been published. They showed that GDP fell
by only 0.3 per cent between the first and second quarters of this year, which was slightly
better than we anticipated. Employment continued to fall in July, but less than expected, and
unemployment fell by a tenth of a percentage point, which was better than market
expectations.
CPI inflation in the United States fell to -2.1 per cent in July, but when food and energy prices
are excluded it fell to 1.5 per cent (see Figure 7). The underlying inflation rate measured in
this way has been relatively stable in recent years and has only declined slightly over the
past year.
An important condition for a turnaround and stabilisation in the US economy is that house
prices touch bottom and begin to rise again. Developments in real house prices in the United
States since 1950 comprise a good example of a price bubble (see Figure 8). The question
now is how far house prices will fall before the turnaround comes. The Federal Reserve
notes in its most recent monetary policy report that developments in the housing market
remain weak, although there are some signs of an improvement.3
Euro area
GDP growth in the euro area remains weak. According to the forecast in the Monetary Policy
Report, GDP in the euro area will fall by an average of almost 5 per cent in 2009. Next year
we are expecting largely zero growth and after that a fairly weak increase. Domestic demand
in particular is expected to be weak for a long time to come in the euro area. The weak
domestic demand means that the euro area is dependent on a boost from abroad - in
particular the United States and other important trading partners - to be able to make a
recovery.
Since the Monetary Policy Report was published statistics received from Eurostat have
reinforced the picture of production in the euro area beginning to stabilise at a lower level
following the heavy fall at the beginning of the year. GDP fell by only 0.1 per cent between
the first and second quarters of the year, which was much better than we had estimated. In
addition, it can be noted that the purchasing managers' index for the euro area rose in July
for the fifth month in a row (see Figure 9). Both the manufacturing and service sectors show
an improvement in July. However, the index is still below 50, which is the level indicating
growth. Employment is continuing to be weak and unemployment rose to 9.4 per cent in
June.
Inflation measured in terms of the EU harmonised index, the HICP, was -0.7 per cent in July.
The HICP is not affected by interest rate cuts in the same way as the Swedish CPI, but it is
affected by energy prices. HICP inflation excluding energy, which is a measure of the
underlying inflation rate, was 1.0 per cent in July. In the euro area, too, the underlying
inflation rate measured in this way has been relatively stable in recent years and declined
considerably less than HICP inflation over the past year (see Figure 10).
Rest of the world
We are forecasting better growth for emerging markets and developing countries outside of
the OECD than for the OECD countries. This view is supported by the IMF's most recent
update to its World Economic Outlook. The IMF writes that the global economy is beginning
to pull out of the recession, but that the stabilisation is uneven between different regions and
that the recovery will be sluggish. The IMF, for example, is forecasting strong growth in
China and India both this year and next year (see Figure 11). However, the economies in
Russia and Brazil are expected to shrink this year and then grow again next year.4
The OECD's leading economic indicators for June paint a slightly brighter picture and
indicate that economic developments have shown a turnaround during the first half of this
year in all of the "BRIC" countries: Brazil, Russia, India and China.5
The current economic situation in Sweden
In my review of the economic situation in Sweden I will focus on five areas: GDP, the labour
market, inflation, the current account and public finances. My experience is that these
variables usually provide a good picture of a country's economic situation.
Signs of a turnaround, but the recovery will be weak
The Swedish economy has also been hard hit by the international economic downturn. We
forecast in the Monetary Policy Report that GDP in Sweden will fall by more than 5 per cent
this year (see Figure 12). However, during the spring there were several signs that the deep
recession may have bottomed out. The financial markets have begun to function better,
which creates opportunities for an economic recovery. World trade, which is very important
for the Swedish economy, has also shown signs of stabilising during the spring.
At the same time, we believe that the recovery will be weak. This is usually the case
following serious financial crises. Our forecast is that GDP will not reach the same levels as
prior to the start of the economic downturn in the second quarter of 2008 until 2012.
Since the most recent monetary policy meeting there have been further signs to support the
view that the worst is now over. The preliminary national accounts published on 31 July
indicate that GDP remained unchanged between the first and second quarters of this year
after four quarters of falling GDP (calendar-adjusted). This is a slightly better outcome than in
our July forecast, where we assumed that GDP would fall by 0.3 per cent in the second
quarter and that the fall would not come to a halt until the third quarter. However, there was
unusually great uncertainty regarding the preliminary national accounts figures on this
occasion.
In recent months various confidence indicators have also shown an improvement. The
National Institute of Economic Research's Economic Tendency Survey, which summarises
companies' and households' views of the economic situation, increased by almost seven
units in July, to 87.1. However, the level is still below 100 and indicates that the mood among
companies and households is still much weaker than normal (see Figure 13).6 The
purchasing managers' index for July was also more positive than market expectations had
implied. It rose by almost four units to 54.3 and was thus above 50 for the second month in a
row (see Figure 14). The purchasing managers' index is usually a slightly quicker indicator of
developments than the economic tendency survey and an index above 50 indicates growth.7
Labour market continues to weaken
Our assessment in the most recent Monetary Policy Report was that the labour market would
continue to be weak. A deterioration in the labour market usually lags behind in an economic
downturn, which was also the case this time. We are expecting employment to fall by around
300,000 persons from the peak in 2008 to a trough in 2011 and that unemployment will
continue to rise to around 11 per cent (see Figures 15 and 16)
After the recent monetary policy meeting new information was received from the Labour
Force Surveys, which was roughly in line with our assessment. Employment fell by 1.7 per
cent in June compared with the same month in the previous year and unemployment
increased to 9.8 per cent. This was respectively two-tenths and one-tenth of a percentage
point better than we had forecast.8
Underlying inflation is in line with the inflation target of 2 per cent
Inflation has fallen rapidly in recent months and is expected to become negative for a large
part of the year. However, CPI inflation is strongly affected by interest rate changes and by
changes in energy prices. It is therefore better to study the underlying inflation rate.
Underlying inflation measured as the CPIF, where mortgage rates are held constant, is
expected to be close to 2 per cent throughout the forecast period (see Figure 17).
New inflation figures published after the most recent monetary policy meeting have also been
roughly in line with our assessments. CPI inflation was -0.9 per cent in July, which was three
tenths of a percentage point lower than our forecast, but underlying inflation measured as the
CPIF amounted to 1.8 per cent, which was entirely in line with our forecast.9
Inflation measured in terms of the EU harmonised index, the HICP, was also 1.8 per cent in
July and when measured as the HICP excluding energy it was 2.8 per cent. Inflation was
thus much higher in Sweden than in the EU. One reason for this is probably that the krona
has weakened since last autumn. We are assuming that the weakening is mainly due to the
financial crisis and that the krona will strengthen again. Since the July monetary policy
meeting, however, the krona has strengthened more than we had anticipated (see Figure
18). Another reason is probably that unit labour costs have risen rapidly for three years in a
row, mainly as a result of falling productivity, but also because of higher wage increases than
before (see Figure 19).
According to Prospera's most recent survey in June, inflation expectations five years ahead
were 2.2 per cent and were well-anchored around the inflation target. However, inflation
expectations two years ahead are slightly below the inflation target (see Figure 20).
The current account and public finances are strengths
Sweden's current account and public finances can be said to be its strengths. These look
relatively good in comparison with other countries. Sweden had built up large surpluses in
both its public finances and on its current account prior to the start of the crisis (see Figure
21) and the public sector's indebtedness is low. This has provided a greater degree of
freedom with regard to managing the crisis.
Public finances will deteriorate substantially this year and next year as a result of
expansionary fiscal policy combined with a decline in public income and an increase in
expenditure related to unemployment, etc. as a result of the economic downturn. Our
assessment is that the public sector financial balance will fall from +4 per cent of GDP in the
peak year 2007 to a trough of -4 per cent of GDP in 2010. But this is a much better situation
than in many other countries, such as the United Kingdom, where public finances have also
deteriorated substantially, but where they had a deficit to start with. The ambition in Sweden
for public finances to show a surplus when regarded over an economic cycle has made it
possible to dampen the economic downturn with an active fiscal policy without this leading to
an unmanageably large deficit.
The current account is also showing large surpluses. Our forecast is that the surplus this
year will correspond to around 7 per cent of GDP this year, despite exports being expected
to fall by around 16 per cent. One reason for the large surplus in the current account is that
exports have developed strongly since the early 1990s. At that time exports corresponded to
around 30 per cent of GDP, but now the figure is around 50 per cent of GDP. This means at
the same time that exports are very important to the Swedish economy and that the weak
economic growth abroad therefore hits Sweden particularly hard.
New information during the summer points to a slight improvement
To summarise, the new information received during the summer tends to point to a slightly
stronger economic activity than we had forecast at the beginning of July. GDP was three
tenths of a percentage point better and employment fell two tenths of a percentage point less
than we had forecast. A number of indicators have also exceeded market expectations. All in
all, this supports the view we had that the deep economic recession has bottomed out.
However, most indications are still that the recovery will be weak. Inflation fell slightly more
than we had anticipated in July, but underlying inflation was in line with our forecasts.
However, we will not make an overall assessment of economic developments until it is time
for our next monetary policy decision on 2 September. It is likely that more information will
have come in by then and we will have to update our forecasts.
Monetary policy
Monetary policy is expansionary
Since the financial crisis worsened last autumn, monetary policy has been aimed at
moderating the depth of the economic recession following in the wake of the crisis. The repo
rate was cut from 4.75 per cent in September 2008 to an all-time low of 0.25 per cent in July
2009. The Riksbank has also supplied the banks with liquidity to counteract the negative
effects of the financial crisis. In this section I shall discuss in slightly greater detail our
reasoning at the most recent monetary policy meeting, and the risks I see of developments
being better or worse than we forecast.
In July we cut the repo rate from 0.50 to 0.25 per cent. The economic recession appeared
likely to be deeper than the Riksbank had earlier forecast and we were expecting GDP
growth to be slow over the coming years. Resource utilisation would therefore remain low
throughout the entire forecast period. At the same time, the forecasts for underlying inflation
were close to the inflation target of 2 per cent. We therefore considered that the repo rate
probably needed to remain at this low level until autumn 2010 (see Figure 22).
We also decided to grant loans to the banks of SEK 100 billion, with a twelve-month maturity
and at a fixed interest rate. We have been lending money to the banks since the crisis
worsened in September 2008 to ensure they can manage their liquidity. For instance, we
have granted loans with a one-year maturity at a variable interest rate. The purpose of
granting loans with a one-year maturity at a low and fixed interest rate was to bring down the
rates in the interbank market and thus contribute to lower interest rates on loans to
companies and households. It was a means of increasing the scope for monetary policy to
have the intended effect.
Reasons for optimism
Although the situation is still serious and requires extraordinary measures, there is beginning
to be some cause for optimism. It is now the first time since September last year that our
forecasts and those of other analysts no longer need to be substantially revised down
between the forecasting rounds. After having revised down the forecasts heavily in four
reports in a row since September, we made only a small downward revision in July and the
most recent information points more to a slightly stronger picture of the real economy than
the one we painted then. The IMF has even made an upward revision to the forecasts for the
world economy in its July report.
My assessment in July was that the risk outlook for economic developments in Sweden is
now balanced for the first time since spring 2008. There is an equally great risk that
developments will be better than forecast as that developments will be worse than forecast.
Previously I have mainly seen risks of poorer developments than in our main scenario.
Downside risks primarily include two factors that could indicate a poorer development in the
real economy. One is that the economic recovery abroad could take time, which would have
negative effects on Swedish exports. The other is that the situation in the Baltic countries
could deteriorate and cause larger loan losses for the Swedish banks than we have
anticipated. This could indirectly dampen the recovery in the Swedish economy.
Upside risks include the expansionary fiscal and monetary policy measures taken in most
countries and which may lead to the international recovery taking place sooner than
anticipated. This could also hasten the Swedish recovery by means of an increase in
exports. The new information received during the summer also indicates a slightly stronger
development in economic activity than we had assumed.
One could interpret the recent signs of increased optimism to mean that the need to increase
the repo rate will approach sooner. However, one should take into account the fact that
resource utilisation is very low and will remain so during the forecast period (see Figure 23)
and that our monetary policy task primarily concerns ensuring that inflation remains close to
the target. At present it is difficult to see any indications that inflationary pressures are
increasing. Rather the reverse; the weak labour market and the unusually low resource
utilisation point to low wage increases. This, combined with the fact that productivity usually
improves when economic activity turns around, implies that unit labour costs will be weak in
the coming period. We are also assuming that the krona will strengthen, which will hold back
import prices. It is also difficult to believe that demand would become so strong that it pushes
up inflation.
It is considerations like this that are behind the assessment that I made in July; that the repo
rate will probably need to remain at a low level for a long time to come. Resource utilisation
will remain low during the foreseeable future and it is difficult to envisage any inflationary
pressures. At the same time, borrowers should be aware that the current situation is an
extreme one and that at some point in the future we will need to raise the interest rate back
to a more normal level.
Concluding remarks
I have now described the Riksbank's view and my personal view of developments in Sweden
and abroad. Despite GDP falling heavily this year, employment falling and unemployment
rising, there are now signs that an improvement is on the way. The situation in the financial
markets has improved and the new information received during the summer confirms the
view that the deep recession has bottomed out. But the improvement is from unusually low
levels and the recovery will probably be weak. Inflation will be negative this year, but
underlying inflation will be close to the inflation target of 2 per cent. Monetary policy is aimed
at dampening the economic downturn. The repo rate was cut to an all-time low of 0.25 per
cent in July and is expected to remain at this low level for the coming year.
Thank you for your attention!
1. Financial markets functioning
better
Difference between 3-month interbank rate and expected policy rate, basis
points(Basis spread)
400 400
Sweden
Lehman Brothers
350 350
Euro area
300 300
USA
Secure liquidity
250 250
prior to year-end
200 200
BNP Bear Sterns
150 150
100 100
50 50
0 0
Jan07 Apr07 Jul07 Oct07 Jan08 Apr08 Jul08 Oct08 Jan09 Apr09 Jul09 Oct09
Sources: Reuters EcoWin and the Riksbank
2. Loan losses increasing
SEK billion net, totalled over four quarters, fixed prices, 31 March 2009
120 120
Results before loan losses
Loan losses
100
100
80 80
60 60
40 40
20 20
0 0
-20 -20
90 92 94 96 98 00 02 04 06 08 10
Source: Finansial Stability Report 2009:1, the Riksbank
3. World GDP growth
Annual percentage change
8 8
7 7
6 6
5 5
4 4
3 3
2 2
1 1
0 0
-1 -1
-2 -2
70 75 80 85 90 95 00 05 10
Note. The broken column represents the Riksbank's forecast.
Sources: The IMF and the Riksbank
4. Slow recovery
Quarterly changesin per cent calculated as annual rate,
seasonallyadjusted data
6 6
4 4
2 2
0 0
-2 -2
-4 -4
-6 -6
Euro area
-8 -8
USA
-10 -10
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
2004 2005 2006 2007 2008 2009 2010 2011 2012
Note. Broken columns represent the Riksbank's forecasts in July 2009.
Sources: Bureau of Economic Analysis, Eurostat and the Riksbank
5. The oil price, Brent crude
USD per barrel
140 140
120 120
100 100
80 80
60 60
40 40
20 20
Outcome
Forward rates, average up to and including 25 June 2009
0 0
00 01 02 03 04 05 06 07 08 09 10 11 12
Note. Broken lines represent the Riksbank's forecasts. Sources: Intercontinental Exchange and the Riksbank
6. Commodity prices
USD, Index 2000 = 100
240 240
Food
Other agricultural products
220 220
Metals
Total
200 200
180 180
160 160
140 140
120 120
100 100
80 80
60 60
00 01 02 03 04 05 06 07 08 09 10
Source: The Economist
BIS Review 98/2009
7. Consumer prices USA
Annual percentage change
6 6
CPI CPI excluding energy and food
5 5
4 4
3 3
2 2
1 1
0 0
-1 -1
-2 -2
-3 -3
00 01 02 03 04 05 06 07 08 09 10
Source: Bureau of Labor Statistics and the OECD
8. Real house prices, USA
Index 1950 = 100
200 200
180 180
160
160
140 140
120 120
100 100
80 80
60 60
40 40
20 20
0
0
50 55 60 65 70 75 80 85 90 95 00 05 10
Note. Outcome up to end of Q1 2009.
Source: Robert J. Schiller, Princeton University
9. Signsof a turnaround
Purchasing managers' index, index above 50 indicates growth
70 70
65 65
60 60
55 55
50 50
45 45
40 40
35 35
30 30
Sweden
Euro area
25 25
USA
20 20
00 01 02 03 04 05 06 07 08 09 10
Sources: Institute for Supply Management, NTC Research Ltd and the NIER
10. Consumer prices euro area
Annual percentage change
5 5
CPI HICP excluding energy
4 4
3 3
2 2
1 1
0 0
-1 -1
00 01 02 03 04 05 06 07 08 09 10
Sources: Eurostat and the OECD
11. GDP abroad
Annual percentage change
2008 2009 2010
Brazil 5,1 -1,3 2,5
Russia 5,6 -6,5 1,5
India 7,3 5,4 6,5
China 9 7,5 8,5
Source: IMF July 2009
12. GDP in Sweden
Annual percentage change
5 5
4 4
3 3
2 2
1 1
0 0
-1 -1
-2 -2
-3 -3
-4 -4
-5 -5
-6 -6
00 01 02 03 04 05 06 07 08 09 10 11
Note. Broken columns represent the Riksbank's forecasts.
Sources: Statistics Sweden and the Riksbank
13. Survey indicator
Index
120 120
Survey indicator
Meanvalue
115 115
+/ - one standard deviation
110 110
105 105
100 100
95 95
90 90
85 85
80 80
75 75
70 70
00 01 02 03 04 05 06 07 08 09 10
Source: National Institute of Economic Research (NIER)
14. Signsof a turnaround
Purchasing managers' index, index above 50 indicates growth
70 70
65 65
60 60
55 55
50 50
45 45
40 40
35 35
30 30
Sweden
Euro area
25 25
USA
20 20
00 01 02 03 04 05 06 07 08 09 10
Sources: Institute for Supply Management, NTC Research Ltd and the NIER
15. Employment
Thousands, EU definition, 15-74 years of age, seasonally-adjusted data
4800 4800
4600 4600
4400 4400
4200 4200
4000 4000
3800 3800
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
Note: The dotted line indicates the Riksbank's forecast. Data prior to 2001 has been chained by the Riksbank
Sources: Statistics Sweden and the Riksbank
16. Unemployment
Percentage of workforce, EU definition, 15-74 years of age,
seasonally-adjusted data
14 14
12
12
10 10
8 8
6 6
4 4
2 2
0 0
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
Note: The dotted line indicates the Riksbank's forecast. Data prior to 2001 has been chained by the Riksbank
Sources: Statistics Sweden and the Riksbank
BIS Review 98/2009
17. Inflation close to target
Annual percentage change
5 5
CPI CPIF
4 4
3 3
2 2
1 1
0 0
-1 -1
-2 -2
00 01 02 03 04 05 06 07 08 09 10 11 12
Note. Broken lines represent the Riksbank's forecasts.
Sources: Statistics Sweden and the Riksbank
18. Exchange rates
SEK per EUR and per USD respectively
12 12
SEK/ EUR
SEK/ USD
11 11
10 10
9 9
8 8
7 7
6 6
5 5
04 05 06 07 08 09
Source: Reuters EcoWin
19. Unit labour costs
Annual percentage change
7 7
6 6
5 5
4 4
3 3
2 2
1 1
0 0
-1 -1
Unit labour costs
Labour costs per hour
-2 -2
Productivity
-3 -3
94 96 98 00 02 04 06 08 10
Note. Broken lines and columns represent the Riksbank's forecasts. Sources: StatisticsSweden and the Riksbank
20. Inflation expectations
Annual percentage change
4.0 4.0
5 years
2 years
3.5 3.5
3.0 3.0
2.5 2.5
2.0 2.0
1.5 1.5
1.0 1.0
0.5 0.5
0.0 0.0
96 98 00 02 04 06 08 10
Sources: The NIER and Prospera Research AB
BIS Review 98/2009
21. Current account and public
finances
Per cent of GDP
12 12
Government net lending
Current account
8 8
4 4
0 0
-4 -4
-8 -8
-12 -12
90 92 94 96 98 00 02 04 06 08 10 12
Note. Broken lines represent the Riksbank's forecasts.
Sources: Statistics Sweden and the Riksbank
22. Low repo rate over long
period of time
Per cent, quarterly average
7 7
6 90% 6
75%
50%
5 5
Repo rate
4 4
3 3
2 2
1 1
0 0
-1 -1
-2 -2
04 05 06 07 08 09 10 11 12
Note. The uncertainty interval is calculated using historical forecasting errors.
Source: The Riksbank
BIS Review 98/2009
23. Utilisation of resources
Percentage deviation from the HP trend
6 6
GDP
5 5
Employment
4 4
3 3
2 2
1 1
0 0
-1 -1
-2 -2
-3
-3
-4 -4
-5 -5
00 01 02 03 04 05 06 07 08 09 10 11 12
Note: The dotted line refers to the Riksbank's forecast. Sources: Statistics Sweden and the Riksbank
BIS Review 98/2009