The driving force behind growth can be very strong, as earlier economic upswings have shown. The situation in Sweden – some positive signs What is the situation in Sweden? The weak growth abroad at the end of last year led to an unexpectedly severe slowdown in Swedish exports. This means that the fall in GDP growth in the fourth quarter of last year was larger than we had predicted. The weak year-end has an impact on GDP growth for 2012, which was revised down in April in relation to the forecast made in February. At first glance, the GDP figure may appear ominous. But unlike exports, domestic demand during the fourth quarter was in line with the Riksbank’s forecast. Developments in the retail trade sector and indicators of confidence in the corporate and household sectors pointed to demand beginning to increase again. In addition, exports of goods increased strongly in January and recovered a large part of the fall that took place in the fourth quarter of 2011. 9  The support facilities currently available consist of three parts. The largest, the EFSF (European Financial Stability Facility), was established in spring 2010 and has been built using guarantees from the euro area countries themselves. The second part is the EFSM (European Financial Stability Mechanism) which is based on a guarantee from the EU. The third part, which was also announced in spring 2010, was that the IMF could provide loans of up to EUR 250 billion.
I have on many occasions, at monetary policy meetings and in speeches, put forward the view that policy rate adjustments should normally be made gradually as a result of the uncertainty connected to forecasts and economic statistics. The well-known economists Orphanides and Williams say in an essay that this uncertainty indicates that one should not allow monetary policy to be influenced by contradictory information and statistics that are constantly revised. 10 Instead, one should normally allow monetary policy to change gradually. This limits the impact of contradictory information and statistics that are often revised. Former Federal Reserve Chairman, Alan Greenspan, said “Uncertainty is not just an important feature of the monetary landscape; it is the defining characteristic of that landscape.” I can only agree with him. 10  Orphanides, Athanasios and John C. Williams, “Robust Monetary Policy Rules with Unknown Natural Rates”, Brooking Papers on Economic Activity (2002), pp. 63–118. BIS central bankers’ speeches  9