According to the most common measurement methods, Sweden has the highest incidence of sick leave in the EU. There has also been an increase in work absence due to holiday and other leaves of absence as well as a decrease in overtime and additional working hours. Meanwhile, the labour market has not made satisfactory use of the immigrant population in Sweden. The employment rate among this group has been markedly lower than among native Swedes. In addition, according to Statistics Sweden, population growth in the years ahead will be less favourable from a labour force perspective than it has been up to now. The number of people of working age will indeed continue to rise but by an increasingly smaller amount. This is because the number of people entering retirement in the years ahead will rise sharply. In particular, large numbers of the 1940s generation will start to retire in a few years. This could have a negative impact on potential growth. Over the coming 10-year period, the number of people over 65 years of age is estimated to rise by 270 000 - some 1.6 per cent per year on average. Between 2012 and 2030, this group will increase by around 1.3 per cent per year. The number of people of working age is forecast to rise by 170 000 over the coming 10-year period, i.e. by only approximately 0.3 per cent per year.
The experiences from the beginning of the 1970s and 20 years thereafter indicate that high inflation, devaluations that fuelled economic growth followed by austerity measures to prevent overheating, entailed weak productivity growth and a drop in the standard of living compared with other industrialised nations. The Riksbank can help to create a favourable environment for rapid economic growth but the growth itself must come from other sources than monetary policy. Nevertheless, the Riksbank has every reason to take an interest in these sources of economic growth since fast growth facilitates the Riksbank’s task. This task involves tightening or easing monetary policy to regulate demand, so that it keeps even pace with our country’s growth capacity. In that way inflation is stabilised. A higher potential rate of growth allows scope for higher aggregate demand without giving rise to inflationary pressures. Long-term growth and demand The Riksbank distinguishes between two concepts of growth: potential growth and demand-driven growth. Potential growth is the rate of growth that is sustainable in the long term, taking account of resource growth in the economy and how effectively these resources are employed. Thus, you could say that potential growth is determined by a combination of labour force growth, investment activity and scientific and technological progress. The latter determines how efficiently the labour force and capital can be utilised. None of these fundamental factors can be influenced by the Riksbank other than temporarily. The Riksbank’s work is, however, affected by potential growth.