up inflation to levels not seen since the introduction of the euro. in response, we started a gradual reduction in our asset portfolio and we increased our policy rates by a total of 450 basis points. our strong reaction was key to prevent a deanchoring of expectations and to curb inflation. in terms of economic activity, the slowdown has so far been contained and gradual. however, the incoming data indicate that the future remains uncertain, and the prospects tilted to the downside. the inflationary shock that we were confronted with following the energy crisis has been particularly challenging : it occurred in an already difficult environment, with the world economy recovering from the pandemic and global supply chains still disrupted. furthermore, supply side shocks are particularly difficult to manage using monetary policy instruments. in this context, sustainable and investment - oriented fiscal policies aimed at promoting the energy transition, strengthening the resilience of supply chains and increasing euro area productivity are supportive of our price stability goal. structural reforms and investments to enhance the euro area's supply capacity can help reduce price pressures in the medium term. in this regard, we very much welcome the agreement on the eu's economic governance framework reached a few weeks ago. it is a powerful signal to markets as it reduces uncertainty about fiscal rules in the eu. the reformed framework will help strike a balance between sustainable public finances and sufficient debt reduction on the one hand and room for reforms and investment on the other, while supporting 3 / 4 bis - central bankers'speeches countercyclicality of fiscal policies. achieving this balance turned out to be less straightforward than we might have hoped. it is now crucial that the new fiscal framework is implemented properly and without delay. thank you for your attention. 4 / 4 bis - central bankers'speeches

. this is an example of an important gradual change that has taken place independently of the financial crisis and which will affect developments in the future. it could perhaps be said that the crisis has contributed towards shedding light upon the increased significance of the emerging economies, as these are now driving the recovery of the global economy. interestingly enough, the composition of products in sweden ’ s exports, which was a disadvantage for sweden when the crisis erupted, has now been turned into an advantage. there is a natural explanation for this : just as purchases of goods of this type ( large amounts of which are exported by sweden ) were easy to postpone, so are they also easy to resume. however, over the last year or so, the krona has appreciated considerably, reducing the impetus previously provided by the weakened exchange rate ( see slide 5 ). at the same time, exports are far from being the only part of the swedish economy that has grown. domestic demand in the form of consumption and investments has developed very this was entirely in line with the riksbank ’ s forecast from february, which also predicted gdp growth of 5. 5 per cent for 2010. the slide shows percentages of goods exports, which constitute about two - thirds of sweden ’ s total exports. bis central bankers ’ speeches strongly. so why is the growth of domestic demand also so high in sweden, compared, for example, with the united states and the euro area? there are several explanations for this. to start with, sweden ’ s public finances are in good shape in an international comparison, which means that there will be no need for fiscal policy tightening in the period ahead. in addition, household saving in sweden was high before the crisis broke out. saving increased further in conjunction with the crisis, presumably due to the general uncertainty prevailing. moreover, household confidence has recovered strongly, as various types of survey have shown. together with relatively sizable incomes, this has made it possible for consumption to recover. a further favourable factor is that, in the end, the swedish financial system was never fully drawn into the financial crisis. towards a normalisation of gdp and inflation – even for the repo rate let me refer back to slide 3, which shows the policy rates of sweden, the euro area and the united states. the policy rates of both the united states and the euro area remain on extremely low levels. this emphasises that the situation in these countries is far from being “ business as usual ”. part of this can be explained