monetary policy report july 2009. deep economic downturn repo rate cut to 0.25 per cent low repo...
DESCRIPTION
Low repo rate over a long period of time Per cent, quarterly average Source: The Riksbank Note. Uncertainty bands calculated using historical forecasting errors.TRANSCRIPT
Monetary Policy Report
July 2009
Deep economic downturn Repo rate cut to 0.25 per cent Low repo rate over a long time
Inflation close to target
Signs of a turnaround Positive growth in 2010
Low repo rate over a long period of timePer cent, quarterly average
Source: The RiksbankNote. Uncertainty bands calculated using historical forecasting errors.
-2
-1
0
1
2
3
4
5
6
7
04 05 06 07 08 09 10 11 12-2
-1
0
1
2
3
4
5
6
790%75%50%Repo rate
Deep economic downturnGDP in Sweden, annual percentage change
-15
-10
-5
0
5
10
15
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010-15
-10
-5
0
5
10
15
Note. GDP at recipient prices prior to 1951 from Edvinsson (2005).Sources: Statistics Sweden and the Riksbank
Low resource utilisation during entire forecast periodUnemployment, per cent of labour force, seasonally-adjusted data
Note. Broken lines refer to the Riksbank’s forecasts. Sources: Statistics Sweden and the Riksbank
0
2
4
6
8
10
12
14
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 120
2
4
6
8
10
12
14
Unemployment 16-64 years-oldUnemployment 15-74 years-oldJuly
Signs of a turnaround Purchasing managers’ index, index above 50 indicates growth in industry
Sources: Institute for Supply Management, NTC Research Ltd and Swedbank
30
35
40
45
50
55
60
65
70
00 01 02 03 04 05 06 07 08 09 1030
35
40
45
50
55
60
65
70USAEuro areaSweden
Note. Yellow dot refers to outcomes that were not available at the monetary policy meeting.
Financial markets functioning betterBasis spread, basis points
Sources: Reuters EcoWin and the Riksbank
Note. Difference between 3-month interbank rate and expected policy rate (basis spread)
0
50
100
150
200
250
300
350
400
jan-07 apr-07 jul-07 okt-07 jan-08 apr-08 jul-08 okt-08 jan-09 apr-09 jul-090
50
100
150
200
250
300
350
400SwedenEuro areaUSAUnited Kingdom
GDP growth will accelerate in 2010Quarterly changes in per cent calculated as an annual rate
Sources: Bureau of Economic Analysis, Eurostat, OECD, Statistics Sweden and the Riksbank
-20
-15
-10
-5
0
5
10
00 01 02 03 04 05 06 07 08 09 10 11 12-20
-15
-10
-5
0
5
10
Sweden
USA
Euro area
Inflation close to the target Annual percentage change
Note. Broken lines refer to the Riksbank’s forecasts. Sources: Statistics Sweden and the Riksbank
-2
-1
0
1
2
3
4
5
00 01 02 03 04 05 06 07 08 09 10 11 12-2
-1
0
1
2
3
4
5CPICPIFCPIF excluding energy
Uncertainty in the forecast Interest rate could become higher…
Weaker productivity Faster recovery abroad
…or lower Higher loan losses Lower rate of wage increase
Lending at a fixed interest rate The repo rate has in practice reached its
lower limit The situation in the financial markets is still
not completely normal
Lending with a fixed interest rate increases scope for monetary policy to have the intended effect
Contributes to lower interest rates for companies and households
Repo rate path a forecast – not a promise Per cent, quarterly average
Source: The RiksbankNote. Uncertainty bands calculated using historical forecasting errors.
-2
-1
0
1
2
3
4
5
6
7
04 05 06 07 08 09 10 11 12-2
-1
0
1
2
3
4
5
6
790%75%50%Repo rate
Deep economic downturn Repo rate cut to 0.25 per cent Low repo rate over a long period of time
Inflation close to the target
Signs of a turnaround Positive growth in 2010