or not sweden chooses to take the same path as finland and join the emu, it is important to maintain a high level of ambition with regard to keeping our public finances in good condition, maintaining price stability and creating the right conditions for a good growth in productivity. this creates freedom of action, regardless of whether or not we join the union. there are both advantages and disadvantages in remaining outside. however, the question will not be determined merely by economic arguments, it is more a case of political arguments. it is important to remember this.

ahead, the rate of growth can still be expected to accelerate in the world economy and in swedish export markets. developments in equity markets also indicate expectations of a continued strengthening of economic activity in the period ahead. the rise in equity prices around the world, which began in the spring last year, has continued. at the same time, long - term international interest rates have fallen recently. it is difficult to determine how much of this is due to lower optimism about growth in the coming years or if it perhaps is more indicative of lower expectations of inflation. looking ahead, there is reason for some concern regarding developments in long - term interest rates, partly against the background of the weak us public finances. upswing also evident in sweden, but the picture is not entirely clear with that, i am now ready to discuss the swedish economy. allow me to begin by noting that the swedish economic outlook last year changed in approximately the same way as internationally. during the first half of the year, the economic outlook became increasingly pessimistic. in sweden, it was mainly investment that was weaker than expected. the weak economic activity was also reflected in the riksbank ’ s forecasts of inflation. this in turn was a contributory factor in the riksbank ’ s decisions to cut the repo rate on three occasions for a total of one percentage point. during the latter part of the year, however, the outlook became somewhat less pessimistic. in sweden, the weak investment was countered by favourable growth in consumption, both private and public, and a rise in exports. the assessment at the end of the year was that growth had increased gradually in 2003 and would reach 1. 5 per cent. growth in 2004 and 2005 was forecast to be approximately 2. 5 % both years, which on the whole is somewhat faster than what the riksbank considers to be possible in the long term without giving rise to inflation. new swedish data support this scenario, but the picture is still not entirely unambiguous. the national accounts for the third quarter showed higher growth compared with previous quarters. household consumption also rose, as did exports. at the same time, business tendency data are indicating growing optimism among firms during the latter part of the autumn, while retail sales continue to grow at a historically high level. but growth in industrial production was relatively weak in october and november while there was a reduction in the number of new orders. moreover, new estimates of the public finances indicate that public consumption this year may