Monetary Policy Update December 2011

Monetary PolicyUpdate

December 2011

Swedish economy is slowing down

and inflationary pressures are low

Still considerable unease on the financial markets

Government bonds with approximately 10 years to maturity, percentage points

Source: Reuters EcoWin

0

1

2

3

4

5

6

7

8

0

1

2

3

4

5

6

7

8

08 09 10 11

Spain

Italy

France

Germany

Sweden

High indebtedness – still a long way to go

0

40

80

120

160

200

0

40

80

120

160

200

00 02 04 06 08 10 12 14

USA

Greece

Ireland

Italy

Public debt as a percentage of GDP Source: IMF WEO September 2011

Weak development in the euro area

-16

-12

-8

-4

0

4

8

12

-16

-12

-8

-4

0

4

8

12

07 08 09 10 11 12 13 14

USA

Euro area

GDP, quarterly percentage change as annual rate, seasonally-adjusted data

Sources: Bureau of Economic Analysis, Eurostat, Statistics Sweden and the

Riksbank

Sweden burdened by weak development in the euro area

-16

-12

-8

-4

0

4

8

12

-16

-12

-8

-4

0

4

8

12

07 08 09 10 11 12 13 14

USAEuro areaSweden

GDP, quarterly percentage change as annual rate, seasonally-adjusted data

Sources: Bureau of Economic Analysis, Eurostat, Statistics Sweden and the Riksbank

Clear fall-off in Swedish export orders

-60

-40

-20

0

20

40

60

-60

-40

-20

0

20

40

60

00 01 02 03 04 05 06 07 08 09 10 11

Export orders, net total Source: National Institute of Economic Research

Cautious households and companies

-30

-20

-10

0

10

20

30

40

-30

-20

-10

0

10

20

30

40

00 01 02 03 04 05 06 07 08 09 10 11

Households

Business sector

Confidence indicators for households and entire business sector, net figures, seasonally-adjusted data

Source: National Institute of Economic Research

Weaker labour market

4

6

8

10

4

6

8

10

07 08 09 10 11 12 13 14

October

December

Unemployment, percentage of labour force, seasonally-adjusted dataSources: Statistics Sweden and the Riksbank

Low inflationary pressures

-2

-1

0

1

2

3

4

5

-2

-1

0

1

2

3

4

5

07 08 09 10 11 12 13 14

CPIF

CPI

Annual percentage change Sources: Statistics Sweden and the Riksbank

A low repo rate stabilises inflation around the target

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

07 08 09 10 11 12 13 14

October

December

Repo rate, per cent, quarterly mean values Source: The Riksbank

A forecast not a promise

-1

0

1

2

3

4

5

6

7

-1

0

1

2

3

4

5

6

7

07 08 09 10 11 12 13 14

90%75%50%OutcomeForecast

Unease about public finances subsides

quicker than expected

Problems in the euro area increase

Repo rate, per cent, quarterly mean values Source: The Riksbank

Swedish economy is slowing down

and inflationary pressures are low

Average interest rate for new contracts for companies and households

Per cent Sources: Ecowin and the Riksbank

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

07 08 09 10 11

Weighted average interest rate forhouseholds and companiesRepo rate

Difference between weighted averageinterest rate and the repo rate