Some observers consider that this performance represents a new economic era in which high economic growth and falling unemployment can be achieved without generating increased inflationary pressure. According to this view, potential output has risen in recent years, accompanied by a fall in equilibrium unemployment. Explanations for this could be, for example, improved productivity as a result of new technology and increased international competition. An alternative explanation is that transitory factors, such as the loss of global demand in connection with the crisis in Southeast Asia, have caused prices to fall or remain unchanged. In Sweden, too, economic growth since the mid-1990s has been comparatively good without inflationary pressure giving cause for concern. The monetary stance has been adjusted accordingly and  3  BIS Review 90/1999  the repo rate is currently 2.9%. It is too early, however, to say whether or not this is a sign of some farreaching change in the Swedish economy. The Riksbank will have to take a close look at the incoming statistics and endeavour to arrive at a conclusion. Conclusion There are many signs that the Swedish economy is growing more rapidly. It is only now that we are beginning to see growth rates above 3%. For the Riksbank – as well as for the economy in general – it is important that this trend does not again land us in a situation where inflation is high and variable. Provided the cards are played correctly, growth can be sustained and lead to a permanent increase in employment.
Concerning the involvement of the private sector in financial assistance for indebted countries, we welcome the reaffirmation that the decisions taken on 21 July and 26 and 27 October 2011 concerning Greek debt are unique and exceptional. To accompany fiscal consolidation, the Governing Council calls for the urgent implementation of bold and ambitious structural reforms. Going hand in hand, fiscal consolidation and structural reforms would strengthen confidence, growth prospects and job creation. Key reforms should be rapidly carried out to help the euro area countries to improve competitiveness, increase the flexibility of their economies and enhance their longer-term growth potential. Product market reforms should focus on fully opening up markets to increased competition. Labour market reforms should focus on removing rigidities and enhancing wage flexibility. We are now at your disposal for questions. BIS central bankers’ speeches  3