Monetary Policy Report 2007:1

Monetary Policy Report

2007:1

1. Repo rate with uncertainty bandsPer cent

Source: The Riksbank

0

1

2

3

4

5

6

Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-100

1

2

3

4

5

690%75%50%Repo rate

Note. Broken lines represent the Riksbank’s forecast.

2. GDP with uncertainty bandsAnnual percentage change

Sources: Statistics Sweden and the Riksbank

0

1

2

3

4

5

6

Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-100

1

2

3

4

5

690 %75 %50 %GDP


3. CPI with uncertainty bandsAnnual percentage change


-1

0

1

2

3

4

Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10-1

0

1

2

3

490%75%50%CPI


4. UND1X with uncertainty bandsAnnual percentage change


-1

0

1

2

3

4

Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10-1

0

1

2

3

490%75%50%UND1X


5. Actual and trend labour productivityAnnual percentage change, seasonally adjusted data

Note. Trend calculated using a Hodrick-Prescott filter. Broken lines represent the Riksbank’s forecast.


-2

-1

0

1

2

3

4

5

6

81 83 85 87 89 91 93 95 97 99 01 03 05 07 09-2

-1

0

1

2

3

4

5

6Outcome, MPR 2007:1HP-trend

6. GDPQuarterly changes in per cent, seasonally adjusted data

Sources: Statistics Sweden and the RiksbankNote. Broken lines represent the Riksbank’s forecast.

-0.25

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

94 96 98 00 02 04 06 08 10-0.25

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75Inflation Report 2006:3MPR 2007:1

7. Number of hours workedIndex 2002 Q 1 = 100


92

94

96

98

100

102

104

106

108

02 03 04 05 06 07 08 09 1092

94

96

98

100

102

104

106

108Inflation Report 2006:3MPR 2007:1

8. Number of employed and number of people in the labour force

Thousands, seasonally adjusted data


3800

3900

4000

4100

4200

4300

4400

4500

4600

4700

4800

81 83 85 87 89 91 93 95 97 99 01 03 05 07 093800

3900

4000

4100

4200

4300

4400

4500

4600

4700

4800Labour Force, MPR 2007:1Number of employed, MPR 2007:1

9. Proportion of open unemployed and total unemployed

Percentage of the labour force, seasonally adjusted data

Sources: The National Labour Market Board, Statistics Sweden and the Riksbank

0

2

4

6

8

10

12

14

16

81 83 85 87 89 91 93 95 97 99 01 03 05 07 090

2

4

6

8

10

12

14

16Open unemploymentTotal unemploymed

10. Household consumption, disposable income and saving ratio

Annual percentage change and percentage of disposable income

Sources: Statistics Sweden and the RiksbankNote. Broken lines and striped bars represent the Riksbank’s forecast.

-1

0

1

2

3

4

5

6

7

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09-2

0

2

4

6

8

10

12

14Consumption (left scale)Disposable income (left scale)Saving ratio (right scale)

11. InvestmentsPer cent of GDP

Sources: Statistics Sweden and the RiksbankNote. Dots represent the Riksbank’s forecast for the full year.

0

5

10

15

20

25

30

80 82 84 86 88 90 92 94 96 98 00 02 04 06 080

5

10

15

20

25

30TotalBusiness sector excluding housing

12. GDP in the United States and the euro area

Quarterly change in per cent

Sources: Eurostat, the US Department of Commerce and the Riksbank

-0.5

0.0

0.5

1.0

1.5

2.0

01 02 03 04 05 06 07 08 09 10-0.5

0.0

0.5

1.0

1.5

2.0Euro areaUSA

13. Real house prices and private consumption in the United States

Annual percentage change

Sources: Office of Federal Housing Enterprise Oversight and the US Department of Commerce

-8

-6

-4

-2

0

2

4

6

8

10

12

90 92 94 96 98 00 02 04 06-8

-6

-4

-2

0

2

4

6

8

10

12Real house pricesPrivate consumption

14. Swedish exports and export market index for goods



-10

-5

0

5

10

15

20

81 85 89 93 97 01 05 09-10

-5

0

5

10

15

20Swedish exportsExport market index for goods

15. TCW exchange rateIndex, 18 November 1992 = 100

Source: The RiksbankNote. Broken lines represent the Riksbank’s forecast.

120

122

124

126

128

130

132

134

136

138

140

02 03 04 05 06 07 08 09 10120

122

124

126

128

130

132

134

136

138

140OutcomeInflation Report 2006:3MPR 2007:1

16. Nominal hourly wagesAnnual percentage change

Sources: National Mediation Office and the Riksbank

0

1

2

3

4

5

6

7

8

94 96 98 00 02 04 06 080

1

2

3

4

5

6

7

8Public sectorBusiness sector

Note. Dots represent the Riksbank’s forecast.

17. Unit labour costs for the economy as a whole

Annual percentage change, seasonally adjusted data


-1

0

1

2

3

4

5

6

7

8

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09-1

0

1

2

3

4

5

6

7

8Unit labour costProductivityHourly labour cost

18. UND1X and CPIAnnual percentage change


-1

0

1

2

3

4

00 01 02 03 04 05 06 07 08 09 10-1

0

1

2

3

4CPIUND1X

19. UND1X excluding energyAnnual percentage change


0

1

2

3

4

00 01 02 03 04 05 06 07 08 09 100

1

2

3

4UND1X excluding energyForecast, MPR 2007:1Forecast, Inflation Report 2006:3

20. Rep rate forecast and implied forward rates based ongovernment securities on

different occasionsPer cent


1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

04 05 06 07 08 091.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5Repo rateRepo rate forecast, MPR 2007:1Daily listing 5 February 2007Repo rate assumption, Inflation Report 2006:315-day average up to 14 December 2006

Table 1. InflationAnnual percentage change

Sources: Statistics Sweden and The Riksbank Note. The assessment in the October Inflation Report is stated in parentheses.

Annual average 12-month rate 2005 2006 2007 2008 2009 Mar. 07 Mar. 08 Mar. 09 Mar. 10 CPI 0.5 1.4 (1.3) 1.5 (2.0) 2.1 (1.9) 2.1 1.5 (1.7) 2.0 (2.1) 2.1 (1.9) 2.1 UND1X 0.8 1.2 (1.2) 0.7 (1.3) 1.6 (1.6) 1.9 1.0 (1.3) 1.3 (1.4) 1.9 (1.9) 2.0 UND1X excl. energy 0.5 0.5 (0.5) 1.2 (1.3) 1.7 (2.0) 2.0 1.0 (1.0) 1.7 (1.9) 1.9 (2.1) 2.2

Table 2. Key figuresAnnual percentage change unless otherwise specified

Sources: IMF, Intercontinental Exchange, National Mediation Office, Statistics Sweden and The Riksbank

Note. The assessment in the October Inflation Report is stated in parentheses.

Key figures 2005 2006 2007 2008 2009 GDP, world 4.9 5.0 (5.1) 4.7 (4.7) 4.4 (4.4) 4.2 (4.2) Crude oil price Brent, USD/barrel, annual average

54 65 (65) 57 (65) 60 (66) 59 (65)

Exchange rate, TCW index, annual average 128.3 127.4 (127.7) 124.0 (125.4) 123.2 (124.1) 122.6 (123.1) Repo rate, per cent, annual average 1.7 2.2 (2.2) 3.4 (3.2) 3.6 (3.6) 3.7 (3.7) General government net lending, percentage of GDP

2.7 2.9 (2.8) 2.7 (2.3) 2.6 (2.2) 2.4 (2.0)

GDP, Sweden 2.9 4.5 (4.3) 3.5 (3.1) 2.9 (2.7) 2.5 (2.2) Persons in employment 0.5 1.9 (1.9) 2.1 (1.1) 0.9 (0.8) 0.5 (0.4) Open unemployment, per cent of labour force

5.9 5.4 (5.4) 5.1 (5.4) 4.8 (5.1) 4.6 (4.9)

Hourly wage in economy as a whole 3.1 3.2 (3.4) 3.8 (3.8) 3.9 (3.9) 4.0 (3.9)

21. Repo rate assumptionsPer cent


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

04 05 06 07 08 09 100.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0Higher interest rate scenarioLower interest rate scenarioMain scenario


22. UND1XAnnual percentage change


0.0

0.5

1.0

1.5

2.0

2.5

3.0

04 05 06 07 08 09 100.0

0.5

1.0

1.5

2.0

2.5

3.0Higher interest rate scenarioLower interest rate scenarioMain scenario

23. GDPAnnual percentage change, seasonally adjusted

data

0

1

2

3

4

5

6

04 05 06 07 08 09 100

1

2

3

4

5

6Higher interest rate scenarioLower interest rate scenarioMain scenario


24. Number of hours workedAnnual percentage change, seasonally adjusted data


-1,0

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

3,0

04 05 06 07 08 09 10-1,0

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

3,0Higher interest rate scenarioLower interest rate scenarioMain scenario

25. Open unemploymentPercentage of labour force, seasonally adjusted data

3,0

3,5

4,0

4,5

5,0

5,5

6,0

6,5

7,0

7,5

98 99 00 01 02 03 04 05 06 07 08 09 103,0

3,5

4,0

4,5

5,0

5,5

6,0

6,5

7,0

7,5Higher interest rateLower interest rateMain scenario


26. Average number of hours worked per year

Hours per inhabitant, aged 16-64

1150

1170

1190

1210

1230

1250

98 99 00 01 02 03 04 05 06 07 08 09 101150

1170

1190

1210

1230

1250Higher interest rateLower interest rateMain scenario


27. Employment ratePer cent

70

72

74

76

78

80

98 99 00 01 02 03 04 05 06 07 08 09 1070

72

74

76

78

80Lower interest rateLower interest rateMain scenario


28. Estimated labour market gapsPercentage deviation from HP trend


-3

-2

-1

0

1

2

3

98 99 00 01 02 03 04 05 06 07 08 09 10-3

-2

-1

0

1

2



29. Estimated output gapsPercentage deviation from HP trend


-3

-2

-1

0

1

2

3

98 99 00 01 02 03 04 05 06 07 08 09 10-3

-2

-1

0

1

2


30. Nominal wages, scenario with higher wages



0

1

2

3

4

5

6

04 05 06 07 08 09 100

1

2

3

4

5

6Nominal wage, Higher wagesNominal wage, Main scenario

31. GDP, scenario with higher wagesAnnual percentage change


0

1

2

3

4

5

6

04 05 06 07 08 09 100

1

2

3

4

5

6GDP, Higher wagesGDP, Main scenario

32. Repo rate, scenario with higher wagesPer cent


0

1

2

3

4

5

6

04 05 06 07 08 09 100

1

2

3

4

5

6Repo rate, Higher wages

Repo rate, Main scenario

33. UND1X, scenario with higher wages Annual percentage change


-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

04 05 06 07 08 09 10-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5UND1X, Higher wagesUND1X, Main scenario

34. GDP, scenario with lower international growth



0

1

2

3

4

5

6

04 05 06 07 08 09 100

1

2

3

4

5

6GDP, Lower international growthGDP, Main scenario

35. UND1X, scenario with lower international growth



-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

04 05 06 07 08 09 10-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0UND1X, Lower international growthUND1X, Main scenario

36. Repo rate, scenario with lower international growth



0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

04 05 06 07 08 09 100.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0Repo rate, Scenario with lower international growthRepo rate, Main scenario

37. GDPAnnual percentage change

Sources: Eurostat, OECD and the US Department of Commerce

0

1

2

3

4

5

98 99 00 01 02 03 04 05 060

1

2

3

4

5

OECDUSAEuro area

38. Employment and private consumption in the United States


Sources: Bureau of Labor Statistics and US Department of Commerce

-2

-1

0

1

2

3

4

5

6

98 99 00 01 02 03 04 05 06 07-2

-1

0

1

2

3

4

5

6Private consumptionEmployment

39. Purchasing managers index in the United States

Index, unchanged activity = 50

Source: Institute for Supply Management

40

45

50

55

60

65

70

98 99 00 01 02 03 04 05 06 0740

45

50

55

60

65

70Service sectorManufacturing industry

40. Economic indicators for the euro areaIndex, 2000 = 100, and annual percentage change

Sources: European Commission and OECD

88

90

92

94

96

98

100

102

104

106

108

110

112

02 03 04 05 06-1

0

1

2

3

4

5

6

7

8

9

10

11European Commission Economic Sentiment (left scale)OECD Composite Leading Indicators (right scale)

41. Confidence indicators for the manufacturing industry in the euro area,

France and GermanyBalance

Source: European Commission

-30

-25

-20

-15

-10

-5

0

5

10

15

20

98 99 00 01 02 03 04 05 06 07-30

-25

-20

-15

-10

-5

0

5

10

15

20GermanyFranceEuro area

42. Oil price, Brent crudeUSD per barrel

Sources: Intercontinental Exchange and the Riksbank

Note. Forward rates are calculated as a 15-day average. Broken lines represent the Riksbank’s forecast.

0

10

20

30

40

50

60

70

80

97 98 99 00 01 02 03 04 05 06 07 08 09 100

10

20

30

40

50

60

70

80OutcomeInflation Report 2006:3Forwards, average up to 5 February 2007Forwards, average up to 16 October 2006

43. CPIAnnual percentage change

Source: OECD

0

1

2

3

4

5

98 99 00 01 02 03 04 05 06 070

1

2

3

4

5

EuroareaOECDUSA

44. Rep rate forecast and implied forward rates based on government securities

Per cent


1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

04 05 06 07 08 091.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5Repo rateRepo rate forecast, MPR 2007:1Daily listing 5 February 2007Repo rate assumption, Inflation Report 2006:315-day average up to 14 December 2006

45. Repo rate forecast and implied forward rates

based on government securities, bank securities

and expectations regarding the repo ratePer cent

Sources: DG ECFIN - Directorate General for Economic and Financial Affairs

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

04 05 06 07 08 091.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5Repo rate Repo rate forecast, MPR 2007:1Based on bank securities/FRA 5 February 2007Based on government securities 5 February 2007Survey average (Prospera), 17 January 2007

46. Monetary policy expectations in the euro area

and the United StatesPer cent


0

1

2

3

4

5

6

04 05 06 07 080

1

2

3

4

5

6RefiRefi 2007-02-05Refi 2006-10-16Fed FundsFed Funds 2007-02-05Fed Funds 2006-10-16

47. Long-term interest ratesPer cent

Source: The RiksbankNote. Government bonds with approximately 10 years left to maturity.

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-072.5

3.0

3.5

4.0

4.5

5.0

5.5SwedenUSAGermany

48. Exchange rate movementsSEK/EUR and SEK/USD


6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-076.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0SEK/EURSEK/USD

49. TCW exchange rateIndex, 18 November 1992 = 100


120

122

124

126

128

130

132

134

136

Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07120

122

124

126

128

130

132

134

136

OutcomeInflation report 2006:3Outcome 4th quarter 2006 and forecast 1st quarter 2007

50. Share indexes in Sweden, the United States

and the euro areaIndex, 1 January 1999 = 100

Source: Reuters Ecowin

40

60

80

100

120

140

160

180

200

220

99 00 01 02 03 04 05 06 0740

60

80

100

120

140

160

180

200

220OMX, SwedenS&P 500, USADAGS 30, Germany

51. Money supplyAnnual percentage change


-4

-2

0

2

4

6

8

10

12

14

16

18

20

99 00 01 02 03 04 05 06-4

-2

0

2

4

6

8

10

12

14

16

18

20M0M2M3

52. House prices and total lending to Swedish households



0

2

4

6

8

10

12

14

97 98 99 00 01 02 03 04 05 060

2

4

6

8

10

12

14

Lending to householdsProperty prices

53. GDP: outcome and the Riksbank’s forecast, and forecasts based on indicator

modelsQuarterly changes in per cent, seasonally adjusted

data


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

03 04 05 06 070.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6GDP according to NA 2006:3Forecast GDP, MPR 2007:1GDP according to NA 2006:2Forecast GDP, IR 2006:3Indicator, MPR 2007:1

54. Retail sales and household consumption


Sources: National Institute of Economic Research and Statistics Sweden

-4

-2

0

2

4

6

8

10

94 96 98 00 02 04 06-4

-2

0

2

4

6

8

10Retail salesTotal household consumptionHousehold consumption of retail goods

55. Gross fixed capital formation Annual percentage change


-40

-30

-20

-10

0

10

20

30

94 95 96 97 98 99 00 01 02 03 04 05 06-40

-30

-20

-10

0

10

20

30Business sector excluding housingPublic authoritiesHousing

56. Foreign trade with goods at fixed prices


Sources: Statistics Sweden and the RiksbankNote. Three-month moving average

-15

-10

-5

0

5

10

15

01 02 03 04 05 06-15

-10

-5

0

5

10

15ExportImport

57. Household expectations of the futureBalance

Source: National Institute of Economic Research

-60

-40

-20

0

20

40

60

94 96 98 00 02 04 06-60

-40

-20

0

20

40

60Swedish economyPersonal financesUnemployment

58. Households’ disposable income and saving ratio

Annual percentage change and percentage of disposable income


-2

0

2

4

6

8

10

12

94 96 98 00 02 04 06-2

0

2

4

6

8

10

12Disposable income, MPR 2007:1Disposable income, Inflation report 2006:3Saving ratio, Inflation Report 2006:3Saving ratio, MPR 2007:1

59. General government net lending


-10

-8

-6

-4

-2

0

2

4

6

94 96 98 00 02 04 06-10

-8

-6

-4

-2

0

2

4

6Net lendingCyclically adjusted net lending

60. Number of employed and number of people in the labour force

Expressed in thousands and as a percentage of the labour force, seasonally adjusted data


3800

3900

4000

4100

4200

4300

4400

4500

4600

4700

4800

94 95 96 97 98 99 00 01 02 03 04 05 063800

3900

4000

4100

4200

4300

4400

4500

4600

4700

4800Labour force, MPR 2007:1Number of employed, MPR 2007:1

61. Vacancies and redundancy noticesThousands, seasonally adjusted data

Source: National Labour Market Board

0

10

20

30

40

50

60

70

80

81 83 85 87 89 91 93 95 97 99 01 03 050

3

6

9

12

15

18

21

24New job vacancies, seasonally adjusted data (left scale)Unfilled vacancies, seasonally adjusted data (left scale)Redundancy notices (right scale)

62. Hiring plans and number of employed in the business sector

Balance and annual percentage change

Sources: National Institute of Economic Research, Statistics Sweden and the Riksbank

-30

-20

-10

0

10

20

30

97 98 99 00 01 02 03 04 05 06 07-6

-4

-2

0

2

4

6Hiring plans, NIER’s quaterly business Tendency Survey (left scale)Number of employed, National Accounts (right scale)

63. Labour productivity for the economy as a whole



-2

-1

0

1

2

3

4

5

6

81 83 85 87 89 91 93 95 97 99 01 03 05-2

-1

0

1

2

3

4

5

6Outcome, Inflation Report 2006:3Outcome, MPR 2007:1HP-trend

64. Estimated gapsPercentage deviation from the trend


-5

-4

-3

-2

-1

0

1

2

3

4

5

81 83 85 87 89 91 93 95 97 99 01 03 05-5

-4

-3

-2

-1

0

1

2

3

4

5GDPHoursEmployment

65. Capacity utilisation in industry according to Statistics Sweden and the

National Institute of Economic Research Per cent, seasonally adjusted data

Sources: National Institute of Economic Research and Statistics Sweden

75

80

85

90

95

81 83 85 87 89 91 93 95 97 99 01 03 0575

80

85

90

95Statistics Sweden, actual capacity utilisation in industryNIER, current capacity utilisation in manufacturing

66. Proportion of firms reporting a shortage of labour

Per cent, seasonally adjusted data

Sources: National Institute of Economic Research

-10

0

10

20

30

40

50

60

70

80

91 93 95 97 99 01 03 05-10

0

10

20

30

40

50

60

70

80Manufacturing sectorConstruction sectorRetail tradePrivate services sector

67. Wages in the construction, industry and private services sectors


Sources: National Mediation Office, Statistics of Sweden and the Riksbank

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

00 01 02 03 04 05 062.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0IndustryConstruction sectorService sectors

68. Employment ratePercentage of the population aged 16-64


70

72

74

76

78

80

82

84

86

81 83 85 87 89 91 93 95 97 99 01 03 0570

72

74

76

78

80

82

84

86Proportion of employed

69. Unit labour costsAnnual percentage change, seasonally adjusted data


-1

0

1

2

3

4

5

6

00 01 02 03 04 05 06-1

0

1

2

3

4

5

6Unit labour cost, PPR 2007:1Unit labour cost, Inflation Report 2006:3.Productivity, PPR 2007:1Productivity, Inflation Report 2006:3Hourly labour cost, PPR 2007:1Hourly labour cost, Inflation Report 2006:3

Note. Broken lines and striped bars for 2006 represent the Riksbank’s forecast.

70. Profits in the business sector according to NA

Percentage of value added


36

38

40

42

44

46

48

50

81 83 85 87 89 91 93 95 97 99 01 03 0536

38

40

42

44

46

48

50


71. Different agents’ expectations of inflation two years ahead


Source: Prospera Research AB

0

1

2

3

4

96 97 98 99 00 01 02 03 04 05 06 070

1

2

3

4Purchasing managersSocial partnersMoney market agents

72. UND1X and CPIAnnual percentage change

Source: Statistics Sweden

-1

0

1

2

3

4

00 01 02 03 04 05 06-1

0

1

2

3

4UND1XCPI

73. Energy prices in CPIAnnual percentage change


-20

-15

-10

-5

0

5

10

15

20

25

30

00 01 02 03 04 05 06-20

-15

-10

-5

0

5

10

15

20

25

30Oil products in CPIElectricity prices in CPI

74. UND1X excluding energy broken down into goods, services and food



-2

-1

0

1

2

3

4

5

6

00 01 02 03 04 05 06-2

-1

0

1

2

3

4

5

6Goods excluding food and energy (27%)Services (45%)Food (18%)

75. Import prices on consumer goods for producers and TCW exchange rate



-10

-5

0

5

10

15

00 01 02 03 04 05 06-10

-5

0

5

10

15TCW exchange rateImport prices of consumer goods in the producer sector

76. Different measures of underlying inflation



-1

0

1

2

3

4

00 01 02 03 04 05 06-1

0

1

2

3

4UND1XUND1X excluding energyUND24TRIM85

B1. Repo rateDeviation, Per cent


-0.05

0.00

0.05

0.10

0.15

0.20

0.25

0.30

1 3 5 7 9 11 13 15 17 19 21Quarter

-0.05

0.00

0.05

0.10

0.15

0.20

0.25

0.30

Note. Deviation calculations, also known as impulse responses, from RAMSES.

B2. UND1XDeviation, Per cent


-0.25

-0.20

-0.15

-0.10

-0.05

0.00

0.05

1 3 5 7 9 11 13 15 17 19 21Quarter

-0.25

-0.20

-0.15

-0.10

-0.05

0.00

0.05


B3. GDP growthDeviation, Per cent


-0.20

-0.15

-0.10

-0.05

0.00

0.05

0.10

1 3 5 7 9 11 13 15 17 19 21Quarter

-0.20

-0.15

-0.10

-0.05

0.00

0.05

0.10


B4. Level of GDPDeviation, Per cent


-0.18

-0.16

-0.14

-0.12

-0.10

-0.08

-0.06

-0.04

-0.02

0.00

1 3 5 7 9 11 13 15 17 19 21Quarter

-0.18

-0.16

-0.14

-0.12

-0.10

-0.08

-0.06

-0.04

-0.02

0.00


Table B1. Comparison of different inflation measures

Annual percentage change and standard deviation


Annual average Standard deviation 2006 1995-2006 1995-2006* 2006 1995-2006 1995-2006*

CPI 1.4 1.1 1.3 1.2 1.0 1.0 UND1X 1.2 1.5 1.7 0.3 0.8 0.8 UNDIMPX -0.2 0.2 0.5 1.2 1.3 1.3 UNDIMPX excl. oil -0.8 -0.2 0.2 0.5 1.5 1.5 UNDINHX 1.8 2.1 2.3 0.5 1.0 1.0 *Measure for inflation for the period 1995-2004 calculated using the method used up to 1 January 2005 and which for 2005-2006 calculated according to the new method.

B5. Forecasts for CPI-inflation at different points of time in 2006

Annual average

Sources: Consensus Economics Inc., the Ministry of Finance, the Swedish Trade Union Confederation, Statistics Sweden and the Riksbank

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Jan-05 Jul-05 Jan-06 Jul-060.0

0.5

1.0

1.5

2.0

2.5

3.0The RiksbankMedian excl. TheRiksbankHighest/lowest forecastOutcome

B6. Forecasts for GDP growth at different points of time in 2005, the Riksbank and

other forecastersAnnual average

Sources: Consensus Economics Inc., the Ministry of Finance, the Swedish Trade Union Confederation, Statistics Sweden and the Riksbank

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Jan-04 Jul-04 Jan-05 Jul-050.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0The RiksbankMedian, excl. the RiksbankHighest/lowest forecastOutcome

B7. A comparison of forecast errors, the Riksbank and other forecasters

Average forecast error CPI inflation 2006

Sources: Consensus Economics Inc. and the Riksbank

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7Th

e Riks

bank

Sven

ska

Hand

elsba

nken SEB

Econ

omist

Inte

llige

nce U

nit

NIER

SBAB

Swed

bank

Mor

gan

Stan

ley

Mer

rill L

ynch

Nord

ea

Hags

tröm

er&

Qvib

erg

Öhm

an

JP M

orga

n

UBS

ING

Finan

cial

Mar

kets

Conf

eder

atio

n of

Swed

ish En

terp

rise

Skan

diab

anke

n

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

B8. A comparison of forecast errors, the Riksbank and other forecasters

Average forecast error GDP growth 2005

Sources: Consensus Economics Inc. and the Riksbank

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7M

erril

l Lyn

ch

Öhm

an

SBAB

Nord

ea

Econ

omist

Inte

llige

nce U

nit

Sven

ska

Hand

elsba

nken

Skan

diab

anke

n

SEB

JP M

orga

n

ING

Finan

cial

Mar

kets

Hags

tröm

er&

Qvib

erg

NIER

The R

iksba

nk UBS

Mor

gan

Stan

ley

Swed

bank

Conf

eder

atio

n of

Sw

edish

Ente

rpris

e

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

B9. Unit labour cost and productivity in the business sector


Note. Broken lines and striped bars represent the Riksbank’s forecast. Calendar-adjusted data Sources: Statistics Sweden and the Riksbank

-2

0

2

4

6

8

94 95 96 97 98 99 00 01 02 03 04 05 06-2

0

2

4

6

8Unit labour costProductivity

B10. Producer prices for consumer goods according to the home market price index

(HMPI) and import price index (IMPI)Annual percentage change

Source: Statistics Sweden

-6

-4

-2

0

2

4

6

8

10

94 95 96 97 98 99 00 01 02 03 04 05 06-6

-4

-2

0

2

4

6

8

10HMPIIMPI

B11. The inflation outcome and inflation in the absence of shocks to productivity growth according to the Riksbank’s

macroeconomic modelAnnual percentage change


0

1

2

3

4

00 01 02 03 04 05 060

1

2

3

4OutcomeModel

Note. UND1X inflation.

B12. Different agents’ expectations of inflation for 2008 in 2006

Per cent

Source: Prospera Research AB

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2006, q 1 2006, q 2 2006, q 3 2006, q 40.0

0.5

1.0

1.5

2.0

2.5

3.0Money market agentsEmployer organisationsEmployee organisationsPurchasing managers, tradePurchasing managers, manufacturing

Table A1. InflationAnnual percentage change

Sources: Statistics Sweden and The Riksbank

2005 2006 2007 2008 2009 UND1X 0.8 1.2 (1.2) 0.7 (1.3) 1.6 (1.6) 1.9 Changes in mortgage interest expenditure* -0.4 0.1 (0.1) 0.8 (0.7) 0.5 (0.4) 0.3 Changes in indirect taxes and subsidies* 0.2 0.1 (0.1) 0.1 (0.1) 0.1 (0.1) -0.1 =CPI 0.5 1.4 (1.3) 1.5 (2.0) 2.1 (1.9) 2.1

Annual average 12-month rate 2005 2006 2007 2008 2009 Mar. 07 Mar. 08 Mar. 09 Mar. 10 CPI 0.5 1.4 (1.3) 1.5 (2.0) 2.1 (1.9) 2.1 1.5 (1.7) 2.0 (2.1) 2.1 (1.9) 2.1 UND1X 0.8 1.2 (1.2) 0.7 (1.3) 1.6 (1.6) 1.9 1.0 (1.3) 1.3 (1.4) 1.9 (1.9) 2.0 UNDINHX 1.0 1.8 (1.9) 1.5 (2.3) 2.2 (2.2) 2.7 2.0 (2.5) 1.7 (1.9) 2.7 (2.7) 2.9 UNDIMPX 0.2 -0.2 (-0.2) -1.0 (-0.9) 0.4 (0.2) 0.1 -1.0 (-1.0) 0.5 (0.4) 0.1 (0.1) 0.1

*Contribution to CPI inflation, percentage points

Table A2. International conditionsAnnual percentage change

Sources: IMF, Intercontinental Exchange, OECD and the Riksbank

GDP 2005 2006 2007 2008 2009

United States 3.2 3.4 (3.4) 2.8 (2.7) 2.9 (2.9) 3.1 (3.1) Japan 1.9 2.2 (2.8) 2.0 (2.2) 1.8 (1.8) 1.5 (1.5) Euro area 1.5 2.7 (2.6) 2.2 (2.0) 2.1 (2.0) 2.0 (1.9) OECD 2.6 3.2 (3.2) 2.7 (2.6) 2.7 (2.6) 2.6 (2.6) World 4.9 5.0 (5.1) 4.7 (4.7) 4.4 (4.4) 4.2 (4.2) CPI United States 3.4 3.2 (3.5) 2.1 (2.6) 2.5 (2.5) 2.5 (2.5) Japan -0.6 0.2 (0.6) 0.4 (0.6) 0.7 (0.7) 0.7 (0.7) Euro area (HICP) 2.2 2.2 (2.3) 2.0 (2.2) 1.9 (1.9) 1.9 (1.9) OECD 2.6 2.6 (2.7) 2.2 (2.4) 2.3 (2.2) 2.1 (2.1) Swedish export market growth 6.9 9.7 (11.0) 7.0 (7.0) 6.5 (6.3) 6.1 (6.0) International producer prices 3.4 3.8 (4.0) 2.8 (3.4) 2.0 (2.2) 1.9 (2.0) Crude oil price, USD/barrel Brent 54 65 (65) 57 (65) 60 (66) 59 (65)

Table A3. Interest rate, exchange rates and public financesPer cent, annual average


2005 2006 2007 2008 2009 Repo rate 1.7 2.2 (2.2) 3.4 (3.2) 3.6 (3.6) 3.7 (3.7) 10-year rate 3.4 3.7 (3.8) 4.2 (4.3) 4.6 (4.7) 4.9 (4.9) Exchange rate, TCW index, 19 November 1992=100 128.3 127.4 (127.7) 124.0 (125.4) 123.2 (124.1) 122.6 (123.1) General government net lending* 2.7 2.9 (2.8) 2.7 (2.3) 2.6 (2.2) 2.4 (2.0) *Per cent of

GDP

Table A4. GDP and GDP by expenditureAnnual percentage change

Sources: IMF, Intercontinental Exchange, OECD and the Riksbank

2005 2006 2007 2008 2009 Private consumption 2.4 2.9 (3.3) 3.7 (3.6) 3.7 (3.5) 3.2 (2.9) Public consumption 0.3 1.5 (1.8) 1.4 (1.4) 0.8 (0.8) 0.8 (0.6) Gross fixed capital formation 8.1 7.6 (8.6) 3.5 (3.6) 3.5 (3.3) 2.9 (2.2) Inventory investments* -0.1 0.2 (-0.3) 0.4 (0.3) 0.1 (0.1) 0.0 (0.0) Exports 6.6 8.6 (8.2) 6.9 (6.5) 6.2 (6.0) 5.7 (5.5) Imports 6.9 7.2 (7.1) 7.6 (7.5) 7.0 (6.9) 6.2 (6.0) GDP 2.9 4.5 (4.3) 3.5 (3.1) 2.9 (2.7) 2.5 (2.2) *Change in per cent of GDP

Table A5. Output, employment and unemployment


Sources: National Labour Market Board, Statistics Sweden and the Riksbank

2005 2006 2007 2008 2009 Population, aged 16-64 0.6 1.0 (0.7) 0.7 (0.7) 0.4 (0.4) 0.2 (0.2) GDP, calendar-adjusted 2.9 4.7 (4.5) 3.6 (3.2) 2.8 (2.6) 2.6 (2.2) Number of hours worked, calendar-adjusted

0.6 2.1 (1.8) 1.8 (1.3) 0.8 (0.6) 0.5 (0.3)

Number of employed 0.5 1.9 (1.9) 2.1 (1.1) 0.9 (0.8) 0.5 (0.4) Labour force 0.5 1.3 (1.3) 1.9 (1.1) 0.6 (0.5) 0.3 (0.1) Open unemployment* 5.9 5.4 (5.4) 5.1 (5.4) 4.8 (5.1) 4.6 (4.9) Labour market programmes* 2.7 3.1 (3.1) 2.0 (2.2) 1.4 (1.6) 1.5 (1.6) *Per cent of labour force

Table A6. Wages, productivity and unit labour costs

for the economy as a wholeAnnual percentage change

Sources: National Mediation Office, Statistics Sweden and the Riksbank

2005 2006 2007 2008 2009 Hourly wage, short-term wage statistics 3.1 3.2 (3.4) 3.8 (3.8) 3.9 (3.9) 4.0 (3.9) Hourly wage, National Accounts 3.1 3.4 (3.6) 4.0 (4.1) 4.2 (4.2) 4.3 (4.2) Employer contributions * -0.1 -0.7 (-0.8) 0.6 (0.8) -0.2 (0.0) -0.2 (0.0) Hourly labour costs, NA 2.9 2.6 (2.8) 4.6 (4.9) 4.0 (4.2) 4.1 (4.2) Productivity 2.3 2.6 (2.7) 1.7 (1.9) 1.9 (1.9) 2.0 (1.9) Unit labour cost 0.6 0.0 (0.0) 2.8 (2.9) 2.1 (2.2) 2.0 (2.2) *Contribution to raise in hourly wage costs, percentage

points

Table A7. Expected inflation according to various surveys

Per cent, average

Sources: NIER and Prospera Research AB

Expected inflation rate in 1 year 2 years 5 years Money market agents 1.8 (1.9) 2.0 (1.9) 1.9 (2.0)

Employer organisations 1.9 (2.4) 2.1 (2.5) 2.2 (2.5)

Employee organisations 2.0 (1.9) 2.1 (2.2) 2.2 (2.3)

Purchasing managers, trade 2.1 (2.2) 2.2 (2.4) 2.2 (2.3)

Purchasing managers, manufacturing 2.3 (2.3) 2.4 (2.4) 2.4 (2.4)

Households (HIP) in January 2.2 (2.1) Firms (Business Tendency Survey) in January (Oct)

1.9 (1.7)

Table A8. Repo ratePer cent


2005 2006 2007 2008 2009 The main scenario 1.7 2.2 3.4 3.6 3.7 Higher interest rates 1.7 2.2 3.6 4.0 4.2 Lower interest rates 1.7 2.2 3.0 3.1 3.2 Higher wages 1.7 2.2 3.5 3.9 4.2 Lower international growth 1.7 2.2 3.2 3.0 2.9

Table A9. UND1XAnnual percentage change



Table A10. GDPAnnual percentage change, calendar-adjusted data



Table A11. Number of hours workedAnnual percentage change, calendar-adjusted data

2005 2006 2007 2008 2009 The main scenario 0.6 2.1 1.8 0.8 0.5 Higher interest rates 0.6 2.1 1.7 0.6 0.4 Lower interest rates 0.6 2.1 2.0 1.2 0.7


Table A12. Open unemploymentPer cent of labour force

2005 2006 2007 2008 2009 The main scenario 0.6 2.1 1.8 0.8 0.5 Higher interest rates 0.6 2.1 1.7 0.6 0.4 Lower interest rates 0.6 2.1 2.0 1.2 0.7


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