Resource utilisation lower than normal The Riksbank’s RU indicator, standard deviation 2  2  1  1  0  0  -1  -1  -2  -2  -3  -3 96  98  00  02  04  06  08  10  Note. The Riksbank’s indicator for resource utilisation summarises information from surveys and labour market data. It is normalised so that the mean value is zero and the standard deviation is one. Source: The Riksbank  Fewer risks of high inflation The second risk relates to the rate of inflation. CPI inflation was high last year, which could have led to a substantial increase in inflation expectations and to excessive wage increases in the autumn round of collective bargaining. But this has not turned out to be the case, so far anyway. Long-term inflation expectations have declined and are now close to the inflation target of two per cent two and five years ahead. In addition, wage agreements have now been signed for large parts of the manufacturing industry. Providing that the new wage agreements for other sectors are in line with the norm set by the manufacturing industry, it appears that total wage increases this year will be around 3.5 per cent. This is actually a rather large wage increase given the fact that unemployment is relatively high, but not so large that it is likely to lead to any serious inflation risks.
Before I move on to my personal reflections on the situation in the Swedish economy, I would like to say that I make the same assessment of the economic outlook in Sweden as that made by the majority of the members of the Executive Board at the latest monetary policy meeting. This assessment is that there will be relative low inflationary pressures and slow growth in the period ahead. It was expected that the Swedish economy would slow down at the end of last year, but the slowdown was more severe than we believed it would be. In the December forecast the Riksbank predicted that growth would decline and that there was some probability of a further repo-rate cut in February. In February, our assessment was that the slowdown in growth in late 2011 had been even more severe. This was because the indicators for exports, among other things, suggested this. I therefore voted with the majority to cut the repo rate by a further 0.25 percentage points. Since then, we have learned that the outcome for GDP growth in the last quarter of 2011 was even worse than we expected at the time of the monetary policy meeting in February. This is largely because exports were even weaker than expected. However, we have also received outcomes for foreign trade in January which indicate that exports strengthened again after the turn of the year.