will ultimately contribute to future prosperity. but experience has taught us that it is a development which needs to be monitored very closely and presupposes a high degree of discipline in economic policy. it requires a great deal from decision - makers in the political system and the supervisory authorities, as well as from those of us who work in central banks. developments in the financial field are creating large opportunities. but it is also important to bear in mind that major, far - reaching changes normally entail risks. in view of these risks, every agent in the financial system needs to act wisely and discerningly. only in this way can the full benefits be drawn from the opportunities that financial developments are providing.

still reason to expect gdp growth in the years ahead to be somewhat higher than what the riksbank believes to be sustainable in the long term. for inflation in the years ahead, it is of course important that there are some unutilised resources to begin with. so what can we expect in terms of inflation developments? in this respect, the outlook has gradually undergone a number of more marked changes since the end of the autumn. principally, as a result of lower expected increases in wage costs and better productivity growth, unit labour costs are expected today compared with in december to grow a number of tenths slower in the years ahead. normally, there are few factors that are more significant for inflation a few years ahead than unit labour costs. in addition, international price pressure is muted. against this background, most factors suggest that inflation in the next two years will be below the riksbank ’ s target. also with regard to the various risks to economic activity and inflation, i believe there is cause to reason somewhat differently than in december. as the economic upswing is gradually confirmed, the risk of a setback in the coming two years will diminish. correspondingly, the probability that economic activity could prove unexpectedly positive and that the upswing will be quicker than anticipated is also likely to increase. however, this does not mean that there are no downside risks whatsoever in the short term. one such risk is that the weak labour market in the us or in sweden - confirmed by the latest data - will worry households and dampen their consumption. it seems unlikely, however, that the upswing could be derailed entirely for this reason. as regards inflationary pressure, there are a number of question marks as i mentioned earlier. we don ’ t know how long the recent rise in productivity will last. in the inflation outlook that i have presented, some consideration has been given to the new data. at the same time, there are good arguments pointing to both higher and lower productivity growth. the same applies to our view of international inflation. as regards wages, there are also risks on the upside, which are essentially related to the way in which wage formation in sweden is conducted. it can still not be ruled out entirely that the wage bargaining round will be derailed. should the outcomes prove higher than expected, it is likely to have an impact on the future level of interest rates. so far i have not said anything about the exchange rate. there may be reason to touch upon this.