However, one should not forget that the strike at Escondida, while very relevant to explain the first quarter figure, is a oneoff event that is not expected to generate significant spillovers on activity elsewhere in the economy, nor on inflation. 13. For these reasons we reduced our growth forecast for 2017, and we are now projecting GDP will be in the 1-2% range (1.5-2.5% in December). At the same time, for 2018 we are expecting the economy to grow between 2.25 and 3.25% (table 1). The growth recovery is based on the fact that the economy does not appear to have any relevant imbalances, the mining-related investment adjustment is expected to end, and as I mentioned at the beginning of my presentation, the global outlook appears more favorable. Fiscal policy is assumed to follow the fiscal consolidation path announced by the Government.
There has also been a recent shift in opinions coming out of academic research, from a broad resistance to taking financial stability into account when shaping monetary policy19 to greater openness to the view that there may be good reasons for doing so.20 Even before the financial crisis hit Europe and Swedish with full force in autumn 2008, there were concerns in the Executive Board that the credit expansion was too rapid and that housing prices were increasing too quickly so that a bubble might build up, and later burst to cause a severe recession. This was not the case in Sweden, but did happen in the United States and several countries in Europe. During the crisis years 2009–2010 the endeavour was instead to use low interest rates and liquidity assistance to the banks to avoid a credit crunch that could intensify the crisis. And we succeeded well in this. During the entire period, the banks’ total lending to households and companies in Sweden increased (see Figure 11). Put greater emphasis on the initial situation and the forecasts for the coming year We should put greater emphasis on the initial position and the forecasts for the coming year than on the long-term forecasts. At the Riksbank, considerable resources are put into analysing the state of the economy. The statistics received are analysed and commented on regularly.