1. Governor Stefan Ingves Introduction on monetary policy Riksdag Committee on Finance 3 March 2011

2. Today’s presentation Where have we come from? Where are we now? Where are we going?

3. The calm before the storm 10-year government bond yields in Sweden, the euro area and the USA Sources: The ECB and Reuters Ecowin Note. Interest rates in per cent. 1. Where have we come from?

4. Financial crisis – GDP falling dramatically Growth in Sweden and abroad Note. Annual percentage change. Sources: The IMF, Statistics Sweden and the Riksbank 1. Where have we come from?

5. Policy rates cut substantially Policy rates in Sweden, the euro area and the USA Sources: The ECB, the Federal Reserve and the Riksbank Note. Interest rates in per cent 1. Where have we come from?

6. The financial crisis in Sweden – what happened? Heavy fall in world trade Swedish exports fell substantially Largely a decline in demand from abroad Differences from 1990s crisis 1990s: ”Rest of the world fairly OK, but Sweden not OK” Now: ”Rest of the world not OK, but Sweden was OK” 1990s: Solvency crisis and very large loan losses Now: Liquidity crisis and limited loan losses with small percentage in Sweden 1. Where have we come from?

7. Strong recovery – exports gone from braking to accelerating the economy World trade volumes, export market and Swedish exports Sources: Netherlands Bureau of Economic Analysis, Statistics Sweden and the Riksbank Index, 2000 = 100, seasonally-adjusted data 2. Where are we now?

8. Emerging economies small but growing share of Swedish exports Percentage of Sweden’s total exports of goods to different countries and regions Note. Shares shown in per cent. However, they do not add up to 100 per cent, as not all countries are shown here. Source: Statistics Sweden 2. Where are we now?

9. Swedish economy growing rapidly… GDP growth 2010 in different countries and regions Note. Annual percentage change. Outcome for whole year 2010 has not been received for a number of countries and regions. In these cases forecasts are shown, based on the first three quarters. Sources: National statistical authorities and Statistics Sweden 2. Where are we now?

10. Inflationary pressures rising Commodity prices Sources: The Economist and Intercontinental Exchange Note. Index 2005 = 100, USD 2. Where are we now?

11. Swedish GDP growth towards more normal levels GDP growth in Sweden, the euro area and the USA Note. Annual percentage change, seasonally-adjusted data. Broken lines and columns represent the Riksbank’s forecasts. Sources: Bureau of Economic Analysis, Eurostat, Statistics Sweden and the Riksbank 3. Where are we going?

12. Unemployment is continuing to fall… Unemployment in Sweden Note. Percentage of labour force, seasonally-adjusted. Data prior to 1993 is spliced by the Riksbank. Broken line represents the Riksbank’s forecast, 15-74 years. Sources: Statistics Sweden and the Riksbank 3. Where are we going?

13. Shortages increasing Percentage of companies with a shortage of labour Source: National Institute of Economic Research 2. Where are we now? Note. Per cent, seasonally-adjusted data.

14. Strong krona Trade-weighted exchange rate, TCW Note. Index, 18 November 1992 = 100. Outcomes are daily listings and forecasts refer to quarterly averages. Broken line represents the Riksbank’s forecast. Source: The Riksbank 3. Where are we going?

15. Inflation close to the target CPI, CPIF and CPIF excluding energy Note. Annual percentage change. The CPIF is the CPI with a fixed mortgage rate. Broken lines represent the Riksbank’s forecasts. Sources: Statistics Sweden and the Riksbank 3. Where are we going?

16. Continuing repo rate increases The Riksbank’s repo rate forecast Note. Repo rate in per cent. Broken line represents the Riksbank’s forecast. Source: The Riksbank 3. Where are we going?