. 2 1. 0 0. 8 0. 6 0. 4 0. 2 0. 0 category 1 category 2 14 - 12 - 2006 category 3 lending growth, per cent danmarks nationalbank chart 3. household debt as a ratio of gdp, 2004 netherlands denmark uk usa portugal norway germany spain sweden austria france finland belgium greece italy 14 - 12 - 2006 danmarks nationalbank chart 4. macro stress test of the danish banking sector losses as a percentage of loans and guarantees 2. 5 2. 0 1. 5 1. 0 0. 5 0. 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 actual development 14 - 12 - 2006 model danmarks nationalbank stress scenario

last year and are currently a bit above longer - run average levels. admittedly, households do not feel the same ebullience they did for some years prior to the financial crisis in the major countries. but that degree of confidence, with its associated patterns of saving and increasing leverage, was unusual, and is not likely to recur. our expectation is that consumer demand will record growth roughly in line with the trend rise in income over the period ahead. housing investment should strengthen given that several factors are supportive – interest rates are low, housing prices are tending to rise, gross rental yields have increased, population growth remains strong and is even picking up a little. admittedly, we are as yet very early in this phase. the increased capacity to extract and ship raw materials will see export volumes continue to strengthen, probably quite substantially, over the next couple of years. some other categories of exports seem to have stopped declining, notwithstanding that the exchange rate remains high. putting all that together, while growth was probably about trend in 2012 as a whole, our sense is that the economy has entered 2013 at a pace a little below that. we have been inclined to think that the near - term outlook could be for more of the same, but things are likely to strengthen further out. we are, of course, conscious that forecasts have a considerable margin of error. we have put some emphasis on this point in the way we present our forecasts in recent times. stepping back from the numbers, in broad terms, the economy will be adjusting to the peak of the mining boom and some other areas of demand will have room to grow more quickly than they have in recent years. this transition will not necessarily be seamless – these things seldom are – but there are reasonable prospects of it occurring over time. as we go through this period, the pressures to adapt business models, contain costs, increase productivity and innovate will remain. but such adjustments are actually positive for longer - run economic performance. inflation is currently consistent with the target. the high exchange rate has lowered prices for tradable goods and services and so helped to hold down measures of inflation over the past couple of years. but some domestic costs have also slowed, in response to softer demand conditions in some areas, even as prices for things such as utilities have risen sharply. the effect of the carbon price on the cpi so far has, as best we can judge, been broadly as expected. our assessment is that inflation will be consistent with