employer. the agreements have contributed to relatively moderate wage increases and low inflation while also compressing wage differentials. the challenge for the future is how to retain wage moderation and take into account the productivity differences between industries and firms. risks and policy challenges needless to say, all is not that rosy and there are significant risks and policy challenges in the horizon. i will mention just two of them. first, one concern is the terms of trade, which, in recent years, have deteriorated and according to forecasts will continue to do so. the prices for ict products are globally falling, due to technology developments and competition. also the price developments in the forestry sector have been rather weak. the challenge is to keep productivity growth high and also to add value into our exports. second, problems are also mounting on the horizon in public finances as the population is ageing earlier in finland than in other industrialised countries. this is due to a high baby - boom in 1945 - 1950. expenditure on pensions and other welfare services increases as the population ages, and at the same time, the room for financing extra expenditure by rising taxation is limited. so we have a major challenge to improve the productivity of the public services. conclusion all in all, in its early years, finnish emu membership seems to have fulfilled most of its promises and avoided most of its risks. there have been benefits in terms of economic efficiency and monetary policy credibility, as predicted, and there is no evidence that the macroeconomic stability of the economy should have deteriorated, rather the opposite. in spite of asymmetric shocks, finland's rate of inflation has been among the lowest in the eu at the same time as its gdp has grown at above the euro area average growth rate. this favourable performance is due to the factors i described. now it is important to avoid any complacence.

degree of uncertainty about the future, we are not expecting the influence of these various factors to wane quickly. some are structural in nature and others will not be overcome until a tight national labour market is sustained for some time. as i will discuss shortly, our monetary policy strategy is designed to achieve this. it is also noteworthy that fiscal policy is also seeking to achieve lower unemployment in australia. productivity growth i would now like to turn to a third issue that will shape the expansion : that is productivity growth. earlier, i spoke about how the economic strategy during the early days of the pandemic was to build a bridge to the other side. on the fiscal front, that bridge was built by governments borrowing against future national income to support households and businesses in the here and now. this was the right thing to do. it was affordable and the higher level of public debt that has resulted from this is manageable. the stronger our future national income is, the more this strategy makes sense. it is for this reason that i have raised the issue of productivity growth. the best response to higher debt levels is stronger growth in future national income, underpinned by a more productive economy. over the past year, australia's national income has once again been boosted by the higher prices for our exports. australia's terms of trade are now approaching the once - in - a - century peak reached during the resources boom a decade ago ( graph 10 ). there has been a lot of focus on the price of iron ore, but the prices of many agricultural commodities have also increased substantially ( graph 11 ). since the start of 2019, wheat prices have increased by 15 per cent, beef prices are up by 20 per cent and lamb prices are up by 25 per cent. the prices of canola, sugar and cotton have also increased sharply over the past year. graph 10 australia ’ s terms of trade * 2018 / 19 = 100 index index * annual data from 1870 to 1959 ; quarterly data from september 1959 sources : abs ; gillitzer and kearns ( 2005 ) ; rba graph 11 rural commodity prices january 2016 = 100, sdr index total index beef index lamb index wheat sources : bloomberg ; landmark ; mla ; rba these higher commodity prices are welcome news and they are helping the national recovery. but, ultimately, it is a more productive economy that will form the basis of sustainable increases in future national income. as has been well documented, labour productivity growth in australia had slowed prior to the