it is part of the strength of the monetary policy regulations that there has sometimes been rather lively discussion, without this having an effect on confidence in our main objectives. another advantage of openness is that it gives forecasters, both inside and outside the riksbank, the opportunity to make comparisons that help to sharpen our forecasting. we must not forget that inflation forecasts are made under great uncertainty and that inflation is affected by unpredictable factors. nevertheless, during the 10 years we have employed inflation targeting, the average inflation rate has remained very close to the target level. to summarise, we can observe that the growth rate for 2003 was weaker than we had expected in 2002. the inflation rate, however, was more or less as expected. it is possible that we became slightly too pessimistic with regard to economic activity in 2003. when we made our monetary policy decision in december the international upturn appeared to have been confirmed, and there were also signs that the swedish economy was strengthening. inflation had developed roughly as we had calculated in earlier forecasts. although energy prices did not fall as far as we had calculated, domestic inflationary pressure excluding energy prices proved to be lower than expected, probably because of the weak labour market development and good productivity growth. the falling import prices had an even more significant effect on inflation. we assumed in our inflation forecast for the coming years that import prices would cease falling and instead begin to rise gently as international economic activity improved. the forecast for domestic cost pressure was adjusted slightly downwards as this was expected to show only a slight increase during the forecast period. the conclusion was that underlying inflation excluding energy, which was assessed as the best mirror of cyclically - related inflationary pressure, was expected to be in line with the target 1 - 2 years ahead, and this was why the repo rate was left unchanged. the information received so far since december does not appear to significantly alter the picture of a recovery in economic growth. however, there may be a risk that the weak labour market situation will last longer than anticipated and have repercussions for growth and inflation through weaker private consumption. now that we are in the midst of compiling the data on which to base our decision at the february meeting, it looks as though the new information received since december gives scope for a further slight downward adjustment to the forecast of domestic cost pressure. this is because it seems that labour market growth will be somewhat weaker than expected, and thereby also the rate of wage increases,

further adjustment in the same direction is one that will be discussed at our monetary policy meeting in february. inflation prospects the average inflation rate in 2003 was roughly as we had forecast at the beginning of the year, although the composition was different. at the beginning of 2003, electricity and oil prices were soaring and inflation was above 3 per cent. we forecast this to be a temporary situation and that energy prices would fall again. this has also been the case, but on the whole consumer prices for energy have increased more than we anticipated. nevertheless, inflation has fallen to the level we expected, as price pressure in the rest of the economy was weaker than we had assumed. one important reason for this is a larger - than - expected fall in prices of imported goods. this in turn was connected with the appreciation of the krona and the weaker economic activity in europe. the strong productivity growth in the business sector probably also contributed. now, as we look ahead, it is important that the more lasting effects on inflation from the business cycle are distinguished from price fluctuations caused by disturbances in the energy markets and other more temporary factors. monetary policy the views on inflation prospects, which in turn are based on the economic situation, employment, productivity and wage developments, held by the riksbank and other analysts have not differed significantly. however, even minor differences between forecasts can lead to differing conclusions with regard to monetary policy. consequently, it is not surprising that the riksbank and other analysts sometimes reach different conclusions on what can be considered a suitable change in the repo rate. however, according to swedish law, independent responsibility for monetary policy has been delegated to the riksbank. naturally, we listen to all well - founded analyses but in each situation we must ultimately rely on our own assessment of the right monetary policy measure for achieving the inflation target. it is nevertheless important, and of course a very reasonable request, that we are able to explain and motivate our assessments and decisions. we achieve this through the publication of our inflation reports, press releases, speeches and the minutes of the monetary policy meetings. if we are open and clear with regard to our forecasts and assessments, it is easier for others to evaluate our monetary policy. this is particularly important as the effects of a repo rate decision are felt after a time lag. a public inflation forecast makes it possible to assess and evaluate the monetary policy stance at an early stage. an open discussion also contributes to increasing understanding of the inflation target.