the economic expansion in china has now been in progress for a number of years, and together with the recovery in the japanese economy it contributed to high growth in several asian countries last year. growth in the euro zone has been relatively weak, but last year there were signs that economic activity was beginning to improve there, too. at the same time as growth in demand in the world economy has been strong, price pressures have been held back. although oil and other commodities have become significantly more expensive for consumers, the general price increases have been relatively small on the whole. this can probably be partly explained by increasing international competition. the upswing in global economic activity has also characterised developments in the swedish economy, which has grown strongly in recent years, with the exception of a slowdown at the end of 2004 / beginning of 2005. despite the good growth in demand, inflation has been low in sweden. this is largely attributable to import prices excluding oil developing weakly and to cost pressures being held back, partly by the strong productivity growth and low capacity utilisation. the development we envisaged in the february inflation report was that international growth would continue to be good. there were some question marks regarding developments in the united states and in the euro area, where preliminary statistics for the fourth quarter of 2005 were surprisingly weak. our assessment was that this could largely be explained by transient factors and that the upswing could nevertheless continue, although possibly at a slightly slower rate. our assessment for the swedish economy was that domestic demand would be strong over the coming years, with gdp growth peaking in 2006. the forecasts indicated that household consumption would rise and investment would continue to increase, but at a slightly slower rate than last year. we also envisaged continuing strong exports as a result of the good international activity. with regard to the labour market, we could observe an apparent upturn in demand for labour and that there were many indications that employment in terms of both persons in employment and of hours worked would increase further. economic resources were expected to become increasingly strained and the rate of wage increase to become gradually higher. however, we assumed nonetheless that the increase in cost pressures would be relatively moderate as a result of continuing good productivity growth over the coming years. all in all, inflation was expected to rise, although at a modest rate, as a result of dampening effects from the developments in productivity and import prices. our forecast was that underlying inflation would rise gradually and approach the 2 per cent target a couple of

annual review meetings are being held with cmds of banks to ensure top management support and commitment to the fi process. what has been achieved so far? 15. a snapshot of the progress made by banks under the fips ( april 10 – march 13 ) for key parameters, during the three year period is as under : nearly 2, 68, 000 banking outlets have been set up in villages as on march 13 as against 67, 694 banking outlets in villages in march 2010 about 7400 rural branches opened during this period nearly 109 million basic savings bank deposit accounts ( bsbdas ) have been added, taking the total no. of bsbdas to 182 million. share of ict based accounts have increased substantially – percentage of ict accounts to total bsbdas has increased from 25 % in march 10 to 45 % in march 13 with the addition of nearly 9. 48 million farm sector households during this period, 33. 8 million households have been provided with small entrepreneurial credit as at the end of march 2013 with the addition of nearly 2. 25 million non farm sector households during this period, 3. 6 million households have been provided with small entrepreneurial credit as at the end of march 2013. about 4904 lakh transactions have been carried out in ict based accounts through bcs during the three year period 16. it is important to analyse this progress against the some disconcerting trends that were noticed in the run up to the structured financial inclusion initiatives that the banks launched since 2010 onwards. first, the number of banked centres in the country between 1991 and 2007 had actually come down ( from 35236 to 34471 ). second, the number of rural branches during the same period had also declined significantly ( from 35206 to 30409 ). against this backdrop, the progress made during 2010 – 13 is certainly remarkable. financial inclusion plan 2013 – 16 17. in order to continue with the process of ensuring access to banking services to the excluded, banks have now been advised to draw up a fresh 3 year financial inclusion plan for the period 2013 – 16. banks have also been advised that the fips prepared by them are disaggregated and percolated down up to the branch level. the disaggregation of the plans is being done with a view to ensure involvement of bank staff across the hierarchy, in the fi efforts and also to ensure uniformity in the reporting structure under the financial inclusion plan. the focus is also now more on the