results and assessments. none of the executive board members takes part in this stage. the idea is that the product then reported to us will as far as possible be a civil servants ’ product. it should not be influenced by the ideas of the different executive board members. the civil servants thus hold a relatively strong position in the process. the executive board ’ s main contribution is not to get involved in all of the details of the forecasts – instead we shall highlight different perspectives and broaden the analysis. the fact that the civil servants produce their own draft forecasts also contributes to strengthening and maintaining the internal competence. the executive board discusses the forecast at the second large meeting the monetary policy department then presents its forecast for the main scenario to the executive board at the second large monetary policy group meeting. this takes place in week five, that is, approximately three weeks prior to the monetary policy meeting. the organisation of this meeting differs from the first one. the meeting is divided into two parts. the first part of the meeting is open to the majority of the employees of the monetary policy department. the civil servants then report their outlook on the economy over the coming years. they present the results from any in - depth reports ordered by the executive board. there is now an opportunity for us executive board members to ask questions about and express opinions on the forecasts to the different sector experts. the second part of the meeting is held in a smaller circle consisting of the executive board, senior staff at the monetary policy department, a couple of advisers and representatives of the communications secretariat. it is now that the executive board discusses and expresses opinions on the main scenario on the basis of its assessments. this may sometimes mean giving different weight to alternative macroeconomic scenarios, that is, the risks. the main scenario is then adjusted in accordance with the views of the executive board. in this situation the forecasts, including the interest rate forecasts, may be regarded as a wellfounded guess as to which main scenario will receive the support of a majority of the executive board members a few weeks later. but there is still a possibility for the executive board to make changes to the forecasts. the executive board can also ask the civil servants to provide further in - depth reports or follow up certain issues. these are then presented 1 - 2 days later at a follow - up meeting with the executive board. here i would like to take the opportunity to refer to the current round of forecasts. on monday we will be discussing the swedish macro

a low level to curb the decline in activity. we have already lowered the interest rate substantially. in the time ahead, we will take a more gradual approach in order to assess the impact of the measures that have already been introduced. if developments move in line with our projections, the key interest rate may be reduced to 1 per cent in the latter half of this year. however, the projections are uncertain. an economic turnaround may occur faster than expected. the low interest rate level may lead to a situation where saving in norway does not pick up as expected or that the krone depreciates markedly. in that case, the key rate may be set higher than projected at this time. on the other hand, there is a risk that the downturn in norway will be more pronounced and longer, or that krone appreciates markedly. in that case, a stronger use of instruments may be appropriate. the downturn abroad and the unusual conditions in the credit market will mark the norwegian economy for a period ahead. mainland gdp is projected to decline by 1 per cent between 2008 ad 2009. unemployment has increased since autumn 2008, but is still low. unemployment is projected to continue to rise to the end of the year and into next year. pay increases are moderate as a result of weaker corporate profitability, rising unemployment and lower inflation. wage growth will show a considerable decline between 2008 and 2009. households have a dimmer view of the future than earlier, but the pessimism is no longer intensifying. this influences private consumption. housing investment has also declined over a period, but house prices now seem to have stabilised, and perhaps started to rise again. household saving is now rising rapidly from a negative level. banks ’ willingness to lend to households has stabilised after the tightening last autumn. however, they are still tightening lending to enterprises. banks are increasing their margins and fees, and require higher equity capital levels of corporate loan applicants. at the same time, funding in the securities market is expensive. the government bond fund facilitates funding primarily for enterprises with a moderate or high credit rating. as a result of extensive official measures the banks now have fairly good access to shortterm and medium - term funding. norges bank has supplied ample short - term liquidity to banks. loans with longer maturities have been widely used, and an increasing number of banks are participating in the credit swap arrangement. we see here an overview of various banks ’ and mortgage companies ’ use of this arrangement