expect inflation to deviate from the target, and why we think this will happen, in connection with our monetary policy decisions. conclusion let me conclude with a brief summary of what i have just said. i have given my views on the current monetary policy situation and described the principles that guide monetary policy. i have also mentioned some of the practical problems we face. when it comes to the current monetary policy situation, my assessment is that the picture we painted of inflation prospects in the february inflation report still holds true to a great extent, although it now looks as though energy prices may contribute to higher inflation in the short term. monetary policy needs to become less expansionary. with regard to the monetary policy strategy, one important message has been that we do not always aim to bring inflation back on target as quickly as possible ; we also give consideration to the real economy. we cannot rule out the possibility of situations arising where it may be necessary to set our sights further ahead than the time period normally used to guide monetary policy decisions. however, in this case we will make it clear in advance that we envisage such a development. thank you!

the economic expansion in china has now been in progress for a number of years, and together with the recovery in the japanese economy it contributed to high growth in several asian countries last year. growth in the euro zone has been relatively weak, but last year there were signs that economic activity was beginning to improve there, too. at the same time as growth in demand in the world economy has been strong, price pressures have been held back. although oil and other commodities have become significantly more expensive for consumers, the general price increases have been relatively small on the whole. this can probably be partly explained by increasing international competition. the upswing in global economic activity has also characterised developments in the swedish economy, which has grown strongly in recent years, with the exception of a slowdown at the end of 2004 / beginning of 2005. despite the good growth in demand, inflation has been low in sweden. this is largely attributable to import prices excluding oil developing weakly and to cost pressures being held back, partly by the strong productivity growth and low capacity utilisation. the development we envisaged in the february inflation report was that international growth would continue to be good. there were some question marks regarding developments in the united states and in the euro area, where preliminary statistics for the fourth quarter of 2005 were surprisingly weak. our assessment was that this could largely be explained by transient factors and that the upswing could nevertheless continue, although possibly at a slightly slower rate. our assessment for the swedish economy was that domestic demand would be strong over the coming years, with gdp growth peaking in 2006. the forecasts indicated that household consumption would rise and investment would continue to increase, but at a slightly slower rate than last year. we also envisaged continuing strong exports as a result of the good international activity. with regard to the labour market, we could observe an apparent upturn in demand for labour and that there were many indications that employment in terms of both persons in employment and of hours worked would increase further. economic resources were expected to become increasingly strained and the rate of wage increase to become gradually higher. however, we assumed nonetheless that the increase in cost pressures would be relatively moderate as a result of continuing good productivity growth over the coming years. all in all, inflation was expected to rise, although at a modest rate, as a result of dampening effects from the developments in productivity and import prices. our forecast was that underlying inflation would rise gradually and approach the 2 per cent target a couple of