from the annual rates of 3 to 4 per cent in recent years to around 2. 5 per cent in the coming years. the gdp figure for q4 last year suggests that a fall - off has already begun. some observers talk of a soft landing. most things point to a downward adjustment of demand to the long - term trend rather than a regular downturn with the risk of a recession. in this situation it is a help that, after a number of years with good growth and price stability, the swedish economy is soundly balanced and that the public finances are also in a comparatively good state. combating inflation effectively and consolidating the government budget have increased the freedom of action in economic policy and made an economic slowdown relatively less difficult to handle. the adjustment we now foresee will occur through a variety of channels. slacker international activity implies a slowing of exports. the decreased order inflow and less pronounced capacity restrictions tend in turn to dampen investment. with falling share prices and less optimism among households, the growth of private consumption becomes more subdued. moreover, stock adjustments this year imply a temporary lowering of demand. in the labour market, the number of new job vacancies is already levelling off, which shows that the growth of employment will be slower in the coming years. this picture of the real economy in the main scenario gives a relatively stable development of inflation around the 2 per cent target in the years ahead, both in terms of the consumer price index and of indexes of underlying inflation. the risks surrounding the main scenario are chiefly concentrated to two alternative scenarios that point in different directions. one alternative scenario has to do, of course, with the risk of a deeper global economic slowdown with further stock - market falls. the swedish economy would be affected via lower export market growth and more subdued demand from households and firms. that would keep inflationary pressure in sweden down compared with the main scenario. however, the downside risk for inflation in sweden would be somewhat limited in that the exchange rate would remain weak as a consequence of the lower international activity and concern about its effects on the swedish economy. the other alternative scenario concerns a risk of higher domestic inflation. the current round of wage negotiations is still in progress and several of the signals in this respect are not encouraging. if the remaining settlements were to be above the levels that have been agreed to date, inflationary pressure may grow, both as a direct result of the high outcomes and indirectly through a greater risk of com

##pensatory wage drift. it is also conceivable that productivity growth will be lower than assumed in the main scenario, leading to rising pressure from costs. a further risk is that the krona ’ s depreciation may persist even if activity becomes stronger. that could generate inflationary impulses. all in all, however, the executive board of the riksbank considers that the spectrum of risks is asymmetric, so that inflation somewhat below the main forecast is more probable than a higher rate. with the risks taken into account, inflation in the coming years is forecast to be around two tenths of a percentage point below the targeted level of 2 per cent. at the same time, the margins are so small that we have decided not to adjust the repo rate at this time. in this context it is worth recalling that in the initial position the repo rate is already lower than the instrumental rates in many other industrialised countries, at the same time as the krona is very weak. that makes it advisable to wait somewhat longer to see in which direction developments appear to be moving. next monetary policy meeting on 26 april in conclusion it can be noted that the picture of both real economic tendencies and price movements that is described in the main scenario seems to be relatively favourable. after a rapid expansion for a number of years, an adjustment is now foreseen that involves a levelling off with low and stable inflation. but while it may seem that we consider everything is fine in the swedish economy, it must be said that prospects for the u. s. economy are difficult to assess. real economic changes may occur, with repercussions on the swedish economy as well as on international capital and currency markets that cannot be predicted at all accurately at present. this is also something that has to be followed and analysed closely, which the riksbank intends to do this spring. we are ready to act if action is called for and when the picture becomes clearer. we will be returning to these matters with an analysis of the situation and a discussion of monetary policy a month from now, on 26 april.