Minutes of the Executive Board’s monetary policy meeting on 19 December 2011

The decision was made against the background of the monetary policy discussion. This discussion concluded that there is still great uncertainty regarding the public-finance problems in, above all, the euro area. Although the global economy as a whole is growing at a relatively good rate, it is expected that growth in the euro area will be low in the period ahead. The weak development of the economy in the euro area is also having a dampening effect on the Swedish economy, which is now slowing down following strong development so far this year. There has been a fall in orders to Swedish export companies and exports will be much weaker next year. Households and companies will postpone their consumption and investment as a result of the poorer outlook. Lower demand will also affect the labour market and unemployment will increase somewhat in the year ahead. At the same time, underlying inflation is low. The weak demand in Sweden together with the poorer outlook abroad will also help to keep inflationary pressures low in the period ahead. The confidence of the Swedish households and companies will gradually recover when concern about the debt problems in the euro area declines. The Swedish economy is then expected to grow at a more normal rate.

Deputy Governors Karolina Ekholm and Lars E.O. Svensson entered a reservation against the decision to cut the repo rate to 1.75 and against the repo-rate path in the Monetary Policy Update.

You can read the full minutes of the monetary policy meeting held on 19 December in the attached PDF file.