will be slightly more unutilised resources in the swedish economy in the coming years than we had previously assumed. our forecast of resource utilisation in sweden has also been affected by the revisions statistics sweden recently made to the national accounts. these indicate that productivity growth in the economy was higher than estimated during the greater part of the 1990s. this in turn indicates that the economy's long - term potential growth rate may be slightly higher. to summarise, i can conclude that the pictures of economic activity in sweden and in the rest of the world are similar to the extent that there appear to be some unutilised resources and that growth will not exceed its long - term potential over the coming years. developments are currently being restrained by the unease over iraq. there is also still great uncertainty regarding the size of the adaptations that remain after the earlier rises in share prices and other asset prices. some figures indicate that most of the adjustments have now been made, but the picture is not unambiguous. nevertheless, a recovery is under way, after what must be regarded in many areas, and particularly in sweden, as a fairly mild slowdown. our forecasts indicate an average gdp growth over the coming years in line with the economy's long - term sustainable rate and resource utilisation is expected to remain largely unchanged over this period. this means that economic activity and the labour market are not expected to put any great pressure on prices and wages at present or in the coming years. there is, of course, a risk that developments will follow completely different paths than those we anticipate in our main scenario. this could in turn entail both upside and downside risks for inflation. the downside risk that concerns us most is connected to international developments. there are problems in the euro area in particular that could lead to a weaker development. the upside risks are mainly linked to domestic price - setting and wage formation. the rise in energy prices pushes up costs in other parts of the economy and can spread. it could also affect expectations and wage demands. we are facing collective wage bargaining rounds in the autumn, which will play a decisive role for the future of the economy. all in all, we have come to the assessment that the risk spectrum is neutral ; we see equally large risks for a lower inflation path than in our main scenario as for a higher path. repo rate lowered 0. 25 percentage points the riksbank's total assessment is that inflation measured at the rate

in society of monetary policy and to evaluate the policy afterwards. both we ourselves and external analysts can take a stand on whether the policy appears sensible, whether the forecasts we make are reasonable, and whether we follow the principles we have declared that we follow. today i intend to begin by describing the current monetary policy situation and then looking back at developments in recent years. the latter discussion shows, not surprisingly, that it is not always so easy in practice to determine what is appropriate monetary policy, despite a clear target with apparently simple principles behind it. current monetary policy higher energy prices behind rising inflation inflation is at present above the target level. over the past twelve months und1x inflation has risen by 3. 3 per cent. does this mean that monetary policy has been too expansionary, or that the interest rate should be raised now? no, it does not. at least we do not believe so. the fact that inflation has risen recently is due to large price rises on a few components of und1x, primarily electricity and oil. excluding energy prices, und1x inflation has risen by 1. 9 per cent over the past year, i. e. very close to the inflation target. it is well known and accepted that monetary policy does not have any great immediate effect on inflation, which is one reason why the interest rate is set in relation to changes in the forecast inflation rate rather than the actual rate. attempts to constantly keep inflation close to the target level could lead to large fluctuations in interest rates, with negative consequences for the economy as a whole. this applies in particular when the economy suffers supply shocks, which at the same time lead to higher prices and lower production. increases in electricity and oil prices are examples of this type of supply shock. it is therefore important to separate the effects of the energy price rises from the effects of other driving forces behind inflation. this is also completely in line with the clarification of the inflation target published by the riksbank in 1999. the riksbank's assessment is that energy prices one to two years ahead will fall back to roughly the same levels as forecast before the increases. however, these forecasts include a slight trend increase in electricity prices. uncertainty in connection with the iraq conflict assessing more exactly how much is a temporary rise in inflation and how much depends on more lasting tendencies is a delicate task. the assessment of economic activity, both here in sweden and abroad, plays an important role here. the uncertainty currently prevailing in the global