As the problems have worsened the recovery that began after the financial crisis in 2008 has ground to a halt, and our assessment in the Monetary Policy Report published in October is that GDP will actually fall in the euro area in 2012. …which is having a major impact on the Swedish economy Sweden is what we usually call a small, open economy. We are highly affected by developments abroad. This high dependence on economic activity abroad has led to considerable fluctuations in production in recent years. The fall in GDP in 2009 was the largest since World War II, but growth in 2010 was the highest for 40 years. The recent weak development of economic activity in the euro area has once again dampened growth prospects in Sweden. An important explanation of why the Swedish economy is affected so much by what happens abroad is that we are highly dependent on the demand for the goods and services that we export to other countries. The euro area is our largest export market and problems in the euro area therefore have a major impact on the demand for Swedish exports. One way for Swedish export companies to reduce this impact is to turn to new markets instead, but this is a very slow process (see Figure 7). The euro area will continue to be easily the largest export market for Sweden for the foreseeable future. Uncertainty abroad affects households and companies in Sweden.
They’re number one in the state a couple of times. President Dudley: I agree with your concern. Is there a question? Audience Member: Yes, what can you do to set up financial resources for minority and women-owned businesses to become involved in the economy? Whether that’s establishing a bank – we’ve asked the controller to control this, let him set up a funding source for us using pension funds, and there’s a way to do that, if you look at it. But we need you to be an advocate for us in that area, but help us come up with an ingenious idea for how we can develop access to capital. President Dudley: Well, I certainly agree with the importance of access to capital, and I certainly agree with you in the importance of having minority work enterprises have the ability to participate in economic development and bidding on contracts. We don’t have the legal authority to do anything direct, but we have a lot of convening authority. One thing that we do do is we do continuing workshops, conferences, symposiums. We’ve had a number of things with small businesses on how small businesses can get access to credit, how small businesses can figure out how to export their goods and services. And so this is something that for you to talk to our regional development people on how we could be helpful.