, substantially above the level of required reserves, has kept very short - term interest rates practically at zero percent, with some minor fluctuations if any. considering that the effects of the quantitative easing policy are coinciding with the effects of short - term interest rates being at practically zero percent, a change of the policy framework itself does not imply any major change in the policy effect. if the trend toward positive year - on - year growth in the cpi becomes firmly established, real short - term interest rates will effectively decline, providing powerful stimulus to economic activity and prices. the level and the time - path of interest rates under the subsequent two processes will certainly depend on economic activity and price developments. if it is judged that upward pressure on prices continues to be contained and the economy follows a sustainable and balanced growth path, this is likely to give the bank latitude in conducting monetary policy. the bank conducts monetary policy to realize the sustainable growth of the japanese economy under price stability. at present, the economic recovery is continuing and the environment influencing prices is beginning to change. if the year - on - year rate of change in the cpi registers zero percent or higher on a sustainable basis, that will mark a sort of milestone toward realizing such a goal. the bank will continue to conduct monetary policy appropriately in accordance with the changes in economic and price conditions to provide support from the financial side for the good performance of the japanese economy over the long term. appropriate monetary policy is also important from the perspective of financial market stability. for example, long - term interest rates have remained stable in the united states in part because of market confidence that the appropriate conduct of monetary policy by the federal reserve will maintain price stability into the future. in japan as well, as noted in the outlook report, together with the maintenance of appropriate monetary policy, the bank's explanation of its thinking on the conduct of monetary policy in detail will contribute to smooth formation of prices in financial markets. closing remarks chubu is a region that has taken advantage of its manufacturing strengths, vigorously developed private - sector business activities, and pulled the japanese economy forward. such originality and inventiveness based on private - sector initiatives will be of the utmost importance for the japanese economy to realize sustainable growth. in that sense, i look forward to the further remarkable development of the chubu region.

oecd area where economic growth has been vigorous. during the first half of this year exports of goods, measured in current prices, rose 9 per cent compared with the same period in 2003. swedish exports have also benefited in part from the revival in the it and telecommunications sectors. however, robust growth in exports is not unique to sweden ; average export growth in the eu has been roughly as strong during the first half of this year. another positive signal is that a pickup in investment, which the riksbank and other forecasters have been waiting a long time for, seems to have begun. this was a major contributory factor to our more positive outlook for the swedish economy at the latest monetary policy meeting in august. since the monetary policy meeting in august, the government and its collaboration parties have announced proposals, intended to be presented in more detail in the budget bill, which may entail a more expansionary fiscal stance in the period ahead. these proposals include cutting income tax for households, abolishing inheritance and gift tax, lowering wealth tax and increasing support to local governments. in total, this is estimated to provide a stimulus of just over sek 20 billion in 2005 and 2006. how large the impact of this will be on economic growth and inflation is not so easy to forecast. this is partly dependent on the extent to which households save their increased incomes. using traditional rules of thumb it could entail a few tenths of one per cent higher gdp growth in both 2005 and 2006. as things stand, therefore, there is reason to expect growth to average above 3 per cent in the coming two years. in spite of the fact that the economy has performed fairly well for almost two years, developments in the labour market so far have been weak. even though the demand for labour is still low, the situation is nonetheless judged to have stabilised somewhat. the historical pattern is for employment to lag behind a change in output somewhat. it is common for economic upswings to begin in manufacturing, which then results in a rise in manufacturing employment. gradually, there is also an increase in output in the services sector, which boosts employment in that sector. our judgement is that this will also be the case this time. at the same time, it is important to remember that a process of structural change has been underway in the swedish economy for some time, where jobs in the manufacturing sector have been replaced by jobs in the private services sector. this development, too, is likely to continue in