1. Monetary Policy Report 2008:1
13 February 2008

2. Repo rate raised by 0. 25 percentage points to 4
Repo rate raised by 0.25 percentage points to 4.25 per cent to attain the inflation target
A repo rate around 4.25 procent over the coming year
The Riksbank’s view of the future repo rate path remains largely the same as in December

3. Repo rate raised Good economic activity in Sweden
High cost pressures – inflation exceeds the target

4. Good economic activity Deviation from the trend, per cent
Hours
Employment
GDP
Note. Percentage deviation from the HP trend.
Sources: Statistics Sweden and the Riksbank

5. Inflation exceeds the target Annual percentage change
CPI
CPIX
Sources: Statistics Sweden and the Riksbank

6. Sources: Statistics Sweden and the Riksbank
Unit labour costs for the ecnomomy as a whole Annual percentage change, seasonally adjusted data
Sources: Statistics Sweden and the Riksbank

7. Source: Prospera Research AB
Inflation expectations have risen Expected inflation in 2 years, per cent
Purchasing managers
Social partners
Money market agents
Source: Prospera Research AB

8. Greater uncertainty Financial turmoil
Subdued growth in the United States

9. Continued financial turmoil The difference between interbank rates and government bond rates, basis points
Euro area (Germany)
Sweden
USA United Kingdom
Note. Refers to the difference between 3-month interbank rates and 3-month treasury bills.
Source: The Riksbank

10. Falling share prices Index, 1 January 1999 = 100
OMX 30, Sweden
S&P 500, USA
DAGS 30, Germany
Source: Reuters EcoWin

11. Sources: Consensus Economics Inc. and the Riksbank
Weak GDP growth in the United States in Consensus and the Riksbank’s forecasts for GDP growth in the United States in 2008 on different occasions
The Riksbank
Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, Oct, Nov, Dec, Jan, Feb
2007
2008
Sources: Consensus Economics Inc. and the Riksbank

12. Good growth in the world as a whole GDP in the world and Sweden, annual percentage change
Note. Calendar-adjusted data.
Sources: IMF, Statistics Sweden and the Riksbank

13. Monetary policy considerations
High cost pressures –
Inflation above the target
Financial turmoil
Subdued growth in the United States

14. Interest rate path
A repo rate around 4.25 per cent over the coming year
Inflation close to the target at the end of next year
Subdued economic activity in Sweden in the future

15. Risks in the interest rate forecast
+ Higher inflationary pressures from abroad
+ Higher wages and lower productivity
+ Higher food and energy prices
Financial turmoil worsens
Weaker international economic activity

16. Summary Good economic activity in Sweden – high cost pressures
Greater uncertainty – subdued growth in the United States and financial turmoil
Interest rate raised to attain the inflation target of 2 per cent
The Riksbank’s view of the future repo rate path remains largely the same as in December

17. The interest rate path is a forecast and not a promise Per cent, quarterly average
Repo rate
Mar 03, Mar 04, Mar 05, Mar 06, Mar 07, Mar 08, Mar 09, Mar 10, Mar 11
Source: The Riksbank