The Swedish economy’s future path  Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, to the Association of Swedish Chambers of Commerce & Industry, Stockholm, on 8 November 2000. *  *  *  First of all, a word of thanks for the invitation to discuss the economic situation in Sweden with you. As I see it, there are a number of dimensions to our economy’s favourable development at present. Today I will be considering some of them, as well as the challenges facing the Riksbank. Globalisation has created a new economic environment Conditions in general for the Swedish economy, and for the environment in which Swedish companies operate, have changed in major respects. I am referring, of course, to the globalisation that has swept over the world in recent decades, leading to more international trade, increased competitive pressure and growing cross-border capital flows. Today people can travel and work all over the world. With the removal of barriers, countries have become increasingly interdependent. These developments have benefited the international economy and raised living standards for many people throughout the world. In the course of two decades, the global level of per capita purchasing power has more than doubled. The improvement has occurred in developing countries as well as in the industrialised world.
Source: Average values by estimates of Chinn (1998), Goldstein (1998), Tornell (1998) and Berg and Pattillo (1998). BIS central bankers’ speeches  15  Chart 15 Current account balances in East Asia and the euro area East Asia (1996) – Euro area (1999)  Note: % of GDP. Source: Haver Analytics. Chart 16 Fiscal costs of recapitalisation as % of GDP  Note: high scenario. Source: IMF (1999). 16  BIS central bankers’ speeches  Chart 17 Argentina public sector debt as % of GDP  Share of foreign currency denominated debt in 2001: 97.59% Source: Haver Analytics. Chart 18 Exchange rates vis-à-vis the USD for selected emerging Asia countries  Note: 02/01/1997=100. Source: Federal Reserve Board of Governors. BIS central bankers’ speeches  17