During the first half of the year, the economic outlook became increasingly pessimistic. In Sweden, it was mainly investment that was weaker than expected. The weak economic activity was also reflected in the Riksbank’s forecasts of inflation. This in turn was a contributory factor in the Riksbank’s decisions to cut the repo rate on three occasions for a total of one percentage point. During the latter part of the year, however, the outlook became somewhat less pessimistic. In Sweden, the weak investment was countered by favourable growth in consumption, both private and public, and a rise in exports. The assessment at the end of the year was that growth had increased gradually in 2003 and would reach 1.5 per cent. Growth in 2004 and 2005 was forecast to be approximately 2.5% both years, which on  2  BIS Review 6/2004  the whole is somewhat faster than what the Riksbank considers to be possible in the long term without giving rise to inflation. New Swedish data support this scenario, but the picture is still not entirely unambiguous. The National Accounts for the third quarter showed higher growth compared with previous quarters. Household consumption also rose, as did exports. At the same time, business tendency data are indicating growing optimism among firms during the latter part of the autumn, while retail sales continue to grow at a historically high level. But growth in industrial production was relatively weak in October and November while there was a reduction in the number of new orders.
ix DE PASTOR R., “SMEs and VSEs in France: an improved financial situation and easier access to credit”, Bulletin de la Banque de France No. 226, December 2019. x INSEE xi ALTAVILLA C.; BOUCINHA M; PEYDRÓ J., “Monetary policy and bank profitability in a low interest rate environment”, Economic Policy, Volume 33, Issue 96, October 2018, pp. 531–586.