monetary policy Per Jansson Riksdag Committee on Finance Deputy - - PowerPoint PPT Presentation

My view on monetary policy

Riksdag Committee on Finance 24 September 2019 Per Jansson Deputy Governor

Unusual monetary policy in recent years

Repo rate Purchases of government bonds

20 40 60 80 20 40 60 80 Per cent and SEK billions, nominal amounts respectively. Source: The Riksbank

The policy has improved the inflation picture significantly

Inflation Inflation expectations

Annual percentage change and per cent, mean value. The dot marks the

• utcome since the Monetary Policy Report in September. Inflation

expectations among money market participants. Sources: TNS Sifo Prospera and Statistics Sweden

And also contributed to good development in the real economy

GDP growth Employment and labour force

Average growth rate in GDP and GDP per capita 2010-2018, and employment and labour force participation as a percentage of the working-age population

• respectively. In Sweden, measures for the working-age population aged 16-64

years are used and aged 15-64 years for OECD countries.

Sources: OECD, Statistics Sweden and the Riksbank.

AUS AUT BEL CAN DNK EST FIN FRA DEU IRL ITA JPN KOR NLD NZL NOR PRT ESP SWE CHE TUR GBR USA EMU OECD

• 2

2 4 6 8

• 2

2 4 6 8

• 2

2 4 6 GDP GDP per capita 65 70 75 80 85 65 70 75 80 85 01 05 09 13 17 Employment rate, Sweden Labour force participation, Sweden OECD countries OECD countries

Poorer sentiment and lower interest rates in 2019

10-year government bonds Clear decline in industry

Per cent and annual percentage change respectively. Yields on 10-year government bonds. The vertical lines indicate the monetary policy meetings in April, July and September. Purchasing managers' index in the manufacturing sector.

Sources: Institute for Supply Management, Markit and Macrobond

Low interest rates supporting economic activity and inflation

Hesitant about increasing the rate around the turn of the year

• Inflation quite low in the near term (even prior to the

August outcome)

• Worrying development tendency for inflation expectations
• No appreciable upside risks
• The Riksbank and leading central banks going in different

directions; what does this mean?

But still not entering a reservation at this time

• Increase not decided, a forecast (that is uncertain)
• Rate path is otherwise reasonable

Per cent. Source: The Riksbank