Kerstin Hessius: Inflationary pressure's risk spectrum more balanced
"In the light of the Riksbank’s repo rate increase of 0.5 percentage points in February, with the aim of providing a good foundation for the continuation of a favourable economic trend with stable prices, sustainable growth and increased employment, I consider that the risk spectrum as regards inflationary pressure is currently more balanced."
Deputy Governor Kerstin Hessius said this in connection with Tuesday’s debate on growth at Controller Congress 2000. Other comments by Ms. Hessius included the following:
"Growth prospects in Sweden at present are robust and during an upward cyclical phase monetary policy must be gradually realigned in a less relaxed direction but the rate at which we have to proceed is by no means self-evident."
"There are grounds for considering whether there are in fact certain signs of the so-called new economy in Sweden; this is at least indicated by the upswing in both productivity and investment in the latter part of last year," Ms. Hessius said.
"The recent economic figures for Sweden confirm the impression that growth is stronger than we foresaw in the December Inflation Report. GDP growth last year was as much as 3.8 per cent; while the rate of price increases has been subdued."
"Growth is generated when the agents in an economy are prepared to invest and consume. This happens when risks decrease relative to the expected return. Monetary policy’s foremost long-term contribution to growth lies in reducing the risks of inflation in the economy by maintaining price stability," Ms. Hessius said.