So despite these crises elsewhere, growth in Sweden remained stable at an average annual rate of 3 to 4%. When the unrest had subsided, the repo rate was raised to the current level of 3.75%. The Riksbank has heralded a repo rate increase for some time During the past year, Riksbank representatives have frequently said that sooner or later, a continuation of strong economic activity will make a further repo rate increase necessary. This is because an annual GDP growth rate of 3 to 4% is more than the economy can achieve without generating imbalances. Higher economic growth is, however, feasible for a time if there are unutilised resources in the economy. But when tensions arise between total demand and supply, various bottleneck problems are liable to result in price and wage increases that ultimately threaten price stability. 1  BIS Review 109/2000  Perhaps the best illustration of this is to be found in the labour market. The increase in employment in recent years has exceeded what demographic factors are contributing to labour force growth by around 40,000 to 70,000 persons a year. Employment growth is in fact the strongest for several decades. Considering how high unemployment has been, this is welcome. But sooner or later, such a development means that firms will have difficulties in recruiting labour. Then, if not before, wage costs are liable to accelerate and push prices up.
This includes expansion of gig workers, increased remote or flexible working arrangements, and a dynamic workforce with more frequent career switches. We have already witnessed, for example, a rise in digital nomads who travel freely and work remotely. Third, an ageing population and the need for diverse participation. Malaysia is swiftly ageing, requiring changes in the labour market policies to cater to an older working segment as well as encouraging higher workforce participation among women and other minority groups. At the same time, we need to resolve the issue of relatively higher unemployment rates among youths. And fourth, the growing generational gap in the workforce. Up to four different generations now coexist in many workplaces. Each have varying perspectives on leadership, learning and workplace culture. We can thus expect a host of opportunities, but also the need the navigate deep-seated differences. 1/4  BIS - Central bankers' speeches  The digital revolution is expected to increase our labour productivity by 30% and create up to 500,000 jobs by 2025. However, the reconfiguration also poses challenges. The need for specialised skills can lead to a widening talent gap, if left unaddressed. Already, 51% of firms surveyed by BNM faced difficulty in hiring workers, largely due to mismatches of skills for the mid and high-skilled segments1. What does this mean for us? Looking ahead, the local and global outlook means organisations need to embrace the 'new normal' by adopting new business models to address overall productivity and challenges at work.