the foundation for good economic growth and wage formation has adjusted to this and functioned well. the social partners have actively contributed to this development and the results of the reforms have been good : growth has been high and real wages have risen, despite the moderate increases in nominal wages. it is of course extremely important that this positive development can continue over the coming years. almost the entire economy is covered by a central wage agreement period that comes to an end in mid - 2007. the wage bargaining rounds in 2007 will be very widespread. the economic conditions prior to the coming bargaining rounds are good and there is reason to believe that wage formation will be able to function efficiently. however, we will of course follow the bargaining rounds very closely, as we always do. i would like to emphasise that the social partners can sign agreements based on the riksbank ’ s inflation target standing firm. judging from the surveys we make of inflation expectations, monetary policy in this respect has a very high level of credibility. see heikensten, l, “ the riksbank ’ s inflation target – clarifications and evaluation ”, sveriges riksbank quarterly review 1, 1999. it is fairly clear that the labour market is facing many challenges and changes. this has been seen in particular from the fact that developments in the labour market have long been weak, despite several years of good growth and historically low interest rates. the poor growth in employment thus does not appear to be primarily the result of weak demand. the explanation must instead be sought among more long - term structural factors. this is reflected in particular in the fact that employment has not recovered since the heavy fall in connection with the crisis at the beginning of the 1990s, despite historically high economic growth. another sign that the unemployment problems have a structural nature is that there are large differences between regions and between professions. although monetary policy is common for the swedish economy as a whole, unemployment figures are twice as high in certain regions of the country as in others, and certain professional groups have twice as many people collecting unemployment benefit as others, and these differences appear to persist over a long period of time. this indicates that the problems are partly related to a low level of mobility in the labour market. the long - term solution to problems of this nature lies outside of the field of monetary policy. let me now explain in a little more detail why it is so important for us to also follow asset prices, such as house price developments and household indebtedness

in the period ahead. households ’ expectations regarding both their own finances and the swedish economy have also begun to rise again after having fallen somewhat at the end of last year. retail sales figures indicate a continuation of robust consumption. low interest rates, rising equity prices and low inflation will boost consumption in the period ahead as well. while on the subject of household consumption allow me to say something about the recent discussion on household indebtedness. debt as a proportion of households ’ disposable income continued to grow last year, and the debt ratio is now approaching the levels seen during the sharp expansion in credit at the end of the 1980s. at the same time, low interest rates mean that households ’ interest costs as a percentage of income is at a historically low level. the latter means that it is not a great problem today for the household sector to bear its debt even if this debt of course limits households ’ scope for consumption in the near future. so this situation hardly constitutes a macroeconomic problem at present. in actual fact, one of the aims of the low interest rates has been exactly to create conditions for households to reduce their saving and maintain their consumption in the weaker economic climate. in spite of this, there is reason for the riksbank to monitor developments carefully. there is also good reason for individual households to reflect on their debt situation. interest rates are unusually low at present and will most probably change in the future. on the whole, there is no reason to make any marked adjustment to the overall outlook for demand in the swedish economy in the coming years compared with in december or february. most factors still indicate that growth in household consumption will continue to be stable around 2. 5 per cent in the years ahead. the contribution to growth from exports will probably be somewhat higher than previously expected, but a large part of the effect on demand will be offset by the fact that this could also be the case for imports. local government consumption appears to be somewhat weaker than we thought in december. investment is a source of uncertainty and could probably pick up somewhat later than forecast. on the whole, therefore, gdp growth may be roughly as we expected in the december inflation report and when we took our decision in february, reaching around 2. 5 per cent per year in the years ahead. low domestic cost pressure in other words, the outlook from the autumn has so far remained largely intact, and economic activity is strengthening as expected. the situation is different for domestic cost pressure. in this respect, since the