Although substantial losses have been taken up in the financial institutions’ balance sheets, and they have been allocated new capital to a large degree, we have not yet seen the end of the financial crisis. Different measures of risk premiums are still at a high level compared with the period prior to last summer. One can illustrate the problems in different ways, for instance by means of the so-called basis spreads, which demonstrate the difference between interest rates between the banks and the expected policy rate set by the central bank. This measure reflects pricing of the risk faced by the banks when lending to other banks. The basis spreads increased significantly in August last year. Sweden has also been affected by the global financial crisis, but to a lesser extent than many other countries. The basis spreads have, for instance, increased more in the United States and the euro area than in Sweden. But it is at the same time important to remember that the crisis has increased the Swedish banks’ vulnerability to shocks. Although the basis spreads have declined somewhat in the euro area and in Sweden since last spring, they have not returned to the earlier levels yet and one cannot exclude the possibility of new problems arising that will push risk premiums even higher. Weaker growth in the USA Economic developments in the United States continued to deteriorate during the first half of the year. This was largely connected to problems in the financial markets.
One important explanation for the rapid growth is that previously planned and closed economies have been transformed into market economies and opened up to the outside world. The forecasts in the Monetary Policy Report entail world GDP growth slowing down to around 4 per cent a year in 20082009 and later rising again to around 4.5 per cent in 2010. Growth in the world was thus expected to remain relatively strong, despite the fact that we see ahead of us a couple of years of slower growth in the United States and the euro area. This is because of the strong growth in emerging and developing economies. For instance, the OECD calculates in its most recent forecast on an average annual GDP growth rate in the so-called BRIC countries of 4-5 per cent for Brazil, 7 per cent for Russia, 8 per cent for India and 10 per cent for China during the years 2008 and 2009. The emerging economies together account for around half of the world GDP and for three quarters of the growth in the world in 2008 and 2009. Rising and falling commodity prices in the world market The strong world growth has been the most important reason behind the sharp rise in commodity prices. Commodity prices have risen for six years, and these increases have accelerated over the last two years. Rapid growth has led to an increase in the demand for energy. It is almost impossible to make good forecasts for the oil price.