Kristina Persson: The Riksbank, growth and inflation Speech by Ms Kristina Persson, Deputy Governor of Sveriges Riksbank, at Företagarnas Riksorganisation, Trosa, 28 February 2002. *  *  *  Firstly, I would like to thank you for the invitation to come here. It is important to meet with representatives of industry and be able to talk about the role of the Riksbank and its significance for growth. The role of the Riksbank The objective for monetary policy is clearly stated in the Sveriges Riksbank Act - to maintain price stability. The Riksbank has further defined this in its inflation target, i.e. that CPI inflation shall amount to 2 per cent, with a tolerated deviation interval of plus/minus one percentage point. This means that when we are determining the direction for monetary policy, we must take into account changes in a number of areas that affect price trends directly or indirectly. I intend to comment on one of these in particular, namely the potential growth of the Swedish economy in a long-term perspective. The Sveriges Riksbank Act also establishes that the Riksbank shall be independent, this means that we six members of the Executive Board, who make decisions regarding the instrumental rate, may not request or receive instructions from the government or parliament. The idea is that we are thereby always free to safeguard the value of money and are not tempted, for instance, to contribute to an increase in growth and employment through lower interest rates during an election year.

The withdrawal of pandemic-related relief measures in major economies and the economic slowdown in China also weakened external demand and, together with the lingering supply chain constraints, contributed to the slowdown in global trade. The recent geopolitical developments have also caused major trade disruptions, tilting policies towards greater self-reliance or “friend-shoring” among the advanced economies (AEs) in order to protect their supply chains. The mediumterm scarring effects of the pandemic on the products and labor markets and productivity, yet to be fully assessed, also weigh on growth. The October 2022 WEO has pared down growth projections for the fourth consecutive time since last year with a clear possibility of further downgrades if the geopolitical risks are not diminished quickly and materially. We are increasingly concerned that the current geopolitical risks will turn into lasting geopolitical fragmentation, posing serious threats to global trade, capital flows, technology transfer and climate policy cooperation. It is still early to declare victory in our fight against the pandemic, a once-in-acentury health crisis that paralyzed the world with untold loss of lives and livelihoods. It is important that we do not lose sight of resurgence risks of new and more virulent COVID-19 variants in the context of a still-low vaccination coverage in the low-income countries (LICs), particularly in Sub-Saharan Africa, and vaccine hesitancy in parts of the AEs. The cooperation that brought us together in the global fight against the pandemic should continue with full force towards equitable and affordable global accessibility of vaccines, tests, and treatments.