in the third quarter. incoming data, notably survey results, bolster our confidence that the ongoing economic expansion will continue to firm and broaden. the passthrough of our monetary policy measures is supporting domestic demand and facilitates the ongoing deleveraging process. the recovery in investment continues to benefit from very favourable financing conditions and improvements in corporate profitability. employment gains, which are also benefiting from past labour market reforms, are supporting real disposable income and private consumption. moreover, the signs of a stronger global recovery and increasing global trade suggest that foreign demand should increasingly add to the overall resilience of the economic expansion in the euro area. however, economic growth continues to be dampened by a sluggish pace of implementation of structural reforms, in particular in product markets, and by remaining balance sheet adjustment needs in a number of sectors. the risks surrounding the euro area growth outlook, while moving towards a more balanced configuration, are still tilted to the downside and relate predominantly to global factors. headline inflation has been recovering from the very low levels seen in 2016, largely owing to higher energy price increases. after reaching 2. 0 % in february 2017, euro area annual hicp inflation stood at 1. 5 % in march. this reflected mainly lower energy and unprocessed food price 1 / 2 bis central bankers'speeches inflation, but also a decline in services price inflation. looking ahead, on the basis of current futures prices for oil, headline inflation is likely to increase in april and thereafter to hover around current levels until the end of this year. however, as unutilised resources are still weighing on domestic wage and price formation, measures of underlying inflation remain low and are expected to rise only gradually over the medium term, supported by our monetary policy measures, the expected continuing economic recovery and the corresponding gradual absorption of slack. turning to the monetary analysis, broad money ( m3 ) continues to expand at a robust pace, with an annual rate of growth of 4. 7 % in february 2017, after 4. 8 % in january. as in previous months, annual growth in m3 was mainly supported by its most liquid components, with the narrow monetary aggregate m1 expanding at an annual rate of 8. 4 % in february 2017, unchanged from the previous month. the recovery in loan growth to the private sector observed since the beginning of 2014 is proceeding. the annual growth rate of loans to non - financial corporations declined to 2. 0 % in february 2017, from 2

changed its fiscal policy and the riksbank did all it could to defend the currency, raising its steering interest rate to 500 per cent. however, sweden was forced to abandon the fixed exchange rate as an anchor to achieve price stability in november 1992. finland had replaced its fixed exchange rate regime earlier in the autumn. the overheating changed into a severe setback at the beginning of the 1990s. between 1990 and 1994 the swedish gdp fell by a total of 4. 7 per cent. in finland the fall experienced during the same period amounted to 10. 4 per cent. finland was hard hit by the large decline in export brought about by the collapse of the then soviet union. open unemployment in sweden rapidly soared from a level of around 3 per cent in 1991 to 8. 2 per cent in 1993. in finland, the number of unemployed increased from just over 6 per cent to 16 per cent. some of this difference can, however, be due to the slightly different form taken by labour market policy in the two countries and to how unemployment is defined. the deficit in public finances increased considerably ; in sweden it was at worst 12 per cent of gdp in 1993 and the borrowing requirement amounted to almost 17 per cent. the deficit in finland in the same year was 7. 3 per cent of gdp. the crisis in the banking system at the beginning of the 1990s hit both swedish and finnish banks hard. sveriges riksbank, like the bank of finland, found itself in a difficult situation at the end of 1992, following the currency crisis. the decision on a new monetary policy strategy was taken in an environment where confidence in monetary and foreign exchange policy was low. earlier actions in economic policy – resorting on several occasions to devaluation in the cost crises that arose – as well as losing the battle of the fixed exchange rate were some explanations for this. alternative strategies for finding an intermediate or direct target for monetary policy were investigated and the riksbank studies solutions used in other countries. as in the case of finland, we in sweden were not used to working in an environment with a floating exchange rate. the last time sweden had a floating exchange rate was for a few years in the 1930s. the general opinion among both politicians and economists was that a fixed exchange rate was the best solution for small, open economies that were very much dependent on other countries. this opinion has since changed – not only in sweden and finland, but also in many other countries. sweden and finland decided on a new