Öberg: The current economic situation
First Deputy Governor Svante Öberg held a speech on friday at Swedbank, where he gave an account of the Riksbank’s assessment of the economic situation abroad and in Sweden as published in the Monetary Policy Report on 1 July this year. He also commented on new information received during the summer, but he made no new overall assessment of economic developments. The Executive Board will not do that until the next monetary policy meeting on 1 September. In conclusion, Mr Öberg reported how the majority of Executive Board members and he personally viewed monetary policy at the monetary policy meeting on 30 June.
His presentation of the current economic situation can be briefly summarised in three points:
- The Swedish economy is developing strongly after the deep recession we have experienced. Inflationary pressures are currently low, but inflation is expected to rise as resource utilisation increases.
- At the most recent monetary policy meeting in June the members of the Executive Board decided to raise the repo rate to 0.50 per cent, and assessed that it would thereafter need to continue to rise towards more normal levels. The earlier extensive lending to the banks is being phased out.
- New information supports the Riksbank’s view that the global economy and the Swedish economy are recovering. However, there are some signs of weakness in the United States and Asia, while Europe looks slightly stronger than expected. The unease on the financial markets has waned, but the situation is still not normal.
Read the whole speech in the PDF file below.
