Bruno Gehrig: Review of the Swiss economy: end-of-year media news conference Introductory remarks by Prof Dr Bruno Gehrig, President of the Swiss National Bank, at the End-of-year Media News Conference, Zurich, 7 December 2001. *  *  *  Financial markets characterised by economic slowdown Development on the financial markets during the current year was characterised by a surprisingly significant weakening of the economy affecting all the major economic regions around the world. The slowdown was most pronounced in the US, but Europe is experiencing a considerable setback in growth as well. Inflationary pressure, already weak, thus eased further. The central banks took advantage of the rapidly increasing flexibility and lowered their key rates, in some cases down to historical lows. Up until the middle of the year, the prevalent opinion in the financial markets was that - buoyed by the Fed's marked interest rate cuts - the US economy, along with the global economy, would stage a fairly swift recovery from the deterioration in the technology sector and the associated weak investment activity. For this reason, the second quarter was characterised by a recovery on most stock markets, increasing bond yields and a US dollar defying gravity. By mid-year it became clear that the cyclical decline was likely to be more serious and to last longer. This reversal of opinion led to investors gradually becoming more risk averse. Equities portfolios were regrouped and invested in the money market and in bonds.
Mr Bäckström elucidates the economic situation in Sweden and describes the consequences it may have for future monetary policy  Speech given by Mr Urban Bäckström, Governor of the Sveriges Riksbank at Föreningssparbanken, Ulricehamn on 1 September 1999. *  *  *  First a word of thanks for the invitation to visit Ulricehamn and talk about something that is close to the heart of a Riksbank governor, namely Sweden’s economic situation. I shall be describing the situation as I see it and saying something about the consequences it may have for future monetary policy. Unexpectedly strong trend The new statistics in recent months show that economic activity is stronger than most forecasters had foreseen as recently as in the spring. The growth of both domestic and external demand has been higher than expected. Relative to the first half of 1998, the GDP growth rate for the first six months of this year is an estimated 3.7%. Most observers are in the process of revising their forecasts upwards, if they have not already done so. In the Inflation Report last June the Riksbank judged that growth this year would reach 2.5%, followed by 3% next year as well as in 2001. When the Executive Board discussed monetary policy on 12 August, however, our assessment was that this year’s growth rate would be 3.5%. We also saw grounds for an upward revision of growth in the next two years, though the prospects for that period are more uncertain.