Rising asset prices and increased household wealth are also contributing to the growth of private consumption. Moreover, the strong economic activity and good stock market trend should contribute to a favourable development of investment. Diagram 2. GDP growth between 1994 and 2002  2. GDP growth 1994 - 2002  5 4  Average 1994-2002  3 2 1 0 1994  1995  1995  1997  1998  1999  2000p 2001p 2002p  Sources: Statistics Sweden and the Riksbank’s forecast for 2000-2002  The Riksbank foresees GDP growth rates of 4.0% this year, 3.5% in 2001 and 2.6% in 2002. These are high rates compared with the 1970s and 1980s. By itself, the upward revision of GDP growth implies that unutilised resources in the economy are brought into production more quickly. The strong economic activity points to a higher rate of wage increases in the coming years. At the same time, it is possible that changes in the labour market will hold wage increases down. A growing proportion of wage increases is being allocated locally, for example. Moreover, inflation expectations among labour market organisations are still in line with the target. This means that, as we have seen in recent years, a real wage increase can be secured without such a large increase in nominal wages. BIS Review 28/2000  4  Historically high real wage increases in recent years should likewise contribute to a moderate development of wages.
Indeed, the pandemic’s immediate economic impact was unprecedented and the pandemic caused the steepest drop in output in Europe’s post-war history. 1/3  BIS central bankers' speeches  With respect to the National Bank of Romania’s responsibilities, since the outbreak of the COVID-19 pandemic in March 2020, we have taken a series of measures proportionally with the evolving situation. When the pandemic broke out, the NBR initiated a program containing measures aimed at supporting the economy: It lowered the policy rate, but stopped at 1.25% Kept liquidity in the system at moderate levels, but avoiding to flood money market with excessive cash and looking carefully to a relative stability of the exchange rate Acquired a moderate volume of government bonds on the secondary market to stabilize the yields. Once inflation re-emerged, the NBR started a normalization process, with an adequate sequence (spring 2021): Stopped the purchase of government bonds Tightened liquidity control Since autumn − increased policy rate and extended the interest rate corridor On the macroprudential front, we have implemented similar measures adopted at the European level in order to ensure banks preserve their ability to finance the economy in a sustainable manner. The Romanian banking system entered the COVID-19 crisis with significantly improved financial soundness indicators compared to the 2008 financial crisis. The banking sector remains well capitalized, with liquidity ratios well above prudential requirements, and with adequate resources to fight back if NPL ratios will restart growing, as expected all around the world.