35
Material for assessing monetary policy - 2005-2007 18 February 2008
Material for assessing monetary
policy-
2005-200718 February 2008
Figure 1. GDP for the United States, euro area and the world
Annual percentage change
0
1
2
3
4
5
6
00 01 02 03 04 05 06 07
0
1
2
3
4
5
6USA
Euro area
World
Sources: Eurostat, IMF and US Department of Commerce
Diagram 2. CPI-inflation in the United States, Euro area and the world
Annual percentage change
0
1
2
3
4
5
6
00 01 02 03 04 05 06 07
0
1
2
3
4
5
6Euro areaWorldUSA
Sources: Bureau of Labor Statistics, Eurostat and IMF Note. HICP in euro area.
Figure 3. Policy ratesPer cent
0
1
2
3
4
5
6
7
00 01 02 03 04 05 06 07
0
1
2
3
4
5
6
7Euro areaUnited KingdomUSA
Sources: Bank of England, ECB and the Federal Open Market Committee
Figure 4. The difference between interbank rates and government bond
rates in 2007Percentage points
Source: the Riksbanken
0.0
0.5
1.0
1.5
2.0
2.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0.0
0.5
1.0
1.5
2.0
2.5United KingdomSwedenUSAEuro area (Germany)
Figure 5. GDP for SwedenAnnual percentage change
0
1
2
3
4
5
00 01 02 03 04 05 06 07
0
1
2
3
4
5GDP
GDP forecast MPR08:1
Sources: Statistics Sweden and the Riksbank
Figure 6. Labour force and employmentThousands, seasonally adjusted
4000
4100
4200
4300
4400
4500
4600
4700
4800
00 01 02 03 04 05 06 07
4000
4100
4200
4300
4400
4500
4600
4700
4800Labour force 16-64
Employment 16-64
Sources: Statistics Sweden and the Riksbank
Figure 7. Labour productivity for the economy as a whole
Annual percentage change, seasonal adjusted data
Sources: Statistics Sweden and the RiksbankNote. Trend calcualted using the Hodrick-Prescott filter.
-2
-1
0
1
2
3
4
5
82 84 86 88 90 92 94 96 98 00 02 04 06
-2
-1
0
1
2
3
4
5Labour produktivityForecast, MPR 2008:1HP-trend
Figure 8. 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
-1
0
1
2
3
4
5
6
7
8Unit labour costsProductivityHourly labour cost
Sources: Statistics Sweden and the Riksbank
Figure 9. CPI, CPIX and CPIX excluding energy
Annual percentage change
-1
0
1
2
3
4
00 01 02 03 04 05 06 07
-1
0
1
2
3
4CPICPIXCPIX ex energy
Sources: Statistics Sweden and the Riksbank
Figure 10. House prices and total lending to Swedish households
Annual percentage change
0
2
4
6
8
10
12
14
00 01 02 03 04 05 06 07
0
2
4
6
8
10
12
14
Lending to housholdsProperty prices
Sources Statistics Sweden and the Riksbank
Figure 11. CPI and CPIX inflationAnnual percentage change
-1
0
1
2
3
4
00 01 02 03 04 05 06 07
-1
0
1
2
3
4
CPICPIX
Source: Statistics Sweden
Figure 12. Energy prices in the CPI adjusted for direct effects of changes in
indirect taxes Annual percentage change
-15
-10
-5
0
5
10
15
20
25
30
00 01 02 03 04 05 06 07
-15
-10
-5
0
5
10
15
20
25
30Enegy, total (9.4%)Electricity (4.3%)Oil products (5.1%)
Sources: Statistics Sweden and the RiksbankNote. In parentheses the wheights in CPI are stated.
Figure 13. CPIX excluding energy divided into goods, services and food
Annual percentage change
-2
-1
0
1
2
3
4
5
6
7
00 01 02 03 04 05 06 07
-2
-1
0
1
2
3
4
5
6
7CPIX excluding energy (90.6%)Goods excluding energy and food (27.2%)Services (45.7%)Food (17.7%)
Sources: Statistics Sweden and the RiksbankNote. The weights in CPIX are stated in the parentheses
Figure 14. Different agents' expectations of inflation for 2009 in 2007
Per cent
Source: Prospera Research AB
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2007, Q 1 2007, Q 2 2007, Q 3 2007, Q 40.0
0.5
1.0
1.5
2.0
2.5
3.0Money market agents Employer organisationsEmployee organisations Purchasing managers, tradePurchasing managers, manufacturing
Figure 15. Inflation and households' inflation expectations 12 month ahead
Annual percentage change
Sources: NIER and the Riksbank
Note. The expectations are advanced 12 month to match the CPI outcome to which they refer.
0
1
2
3
4
05 06 07 08
0
1
2
3
4Households' inflation expectations
Target
CPI
Figure 16. Employment, labour force and open unemployment
Annual percentage change and per cent of labour force, seasonal adjusted data
-1
0
1
2
3
4
5
6
7
00 01 02 03 04 05 06 07
-1
0
1
2
3
4
5
6
7Labour force 16-64Employment 16-64Open unemployment 16-64
Sources: Statistics Sweden and the Riksbank
Figure 17. Productivityscenario, CPIX calculated with long term productivity growth compared to
outcome of CPIXAnnual percentage change
0
1
2
3
4
00 01 02 03 04 05 06 07
0
1
2
3
4CPIX without technologychockCPIX outcome
Sources: Statistics Sweden and the Riksbank
Figure 18. Productivityscenario, growth in GDP calculated with long term productivity growth
compared to outcome for growth in GDP
Annual percentage change, calendar-adjusted data
0
1
2
3
4
5
6
00 01 02 03 04 05 06 07
0
1
2
3
4
5
6GDP without technologychockBNP utfall
Sources: Statistics Sweden and the Riksbank
Table 1. Inflation outcome 2005, 2006 and 2007Annual percentage change
2005 2006 2007CPI 0,5 1,4 2,2CPIX 0,8 1,2 1,2CPIX excl energy 0,4 0,6 1,5
Annual average
Sources: Statistics Sweden and the Riksbank
Figure 19. CPI forecastsAnnual percentage change
Sources: Statistics Sweden and the Riksbank
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
03 04 05 06 07
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5CPI
Forecasts
Figure 20. CPIX forecastsAnnual percentage change
Sources: Statistics Sweden and the Riksbank
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
03 04 05 06 07
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
CPIX
Forecasts
Figure 21. GDP forecastsAnnual percentage change
0
1
2
3
4
5
6
03 04 05 06 07
0
1
2
3
4
5
6GDPForecasts
Sources: Statistics Sweden and the Riksbank
Figure 22. Forecasts of number of employed
Annual percentage change
Sources: Statistics Sweden and the Riksbank
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
03 04 05 06 07
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5Employed
Forecats
Figure 23. Forecasts for the inflation (CPI) 2007, made at different points in time
Annual average
Sources: Consensus Economics Inc, the Ministry of Finance, the Swedish Trade Union, Statistics Sweden and the Riksbank
0.0
0.5
1.0
1.5
2.0
2.5
3.0
IR 06:1 IR 06:2 IR 06:3 MPR 07:1 MPR 07:2 MPR 07:3
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Other forecatsersThe RiksbankOutcome
Figure 24. Ranking of CPI forecasts, 50%Per cent
0 10 20 30 40 50 60 70 80 90 100
SkandiabankenH&Q
CitigroupLO
Sv NäringslivUBSING
Econ IntNordea
SwedbankSEB
Erik Penser FKOECD
JP MorganSHB
Morgan StanleyG S
SBABThe RiksbankMerrill Lynch
NIERÖhmans
The Ministry of Finance
Sources: Consensus Economics Inc, the Ministry of Finance, the Swedish Trade Union, Statistics Sweden and the Riksbank
Figure 25. Ranking of CPI forecasts, 25%Per cent
0 10 20 30 40 50 60 70 80 90 100
SkandiabankenH&Q
CitigroupUBSING
Sv NäringslivEcon Int
SEBLO
NordeaMorgan Stanley
JP MorganOECD
G SSwedbank
NIERErik Penser FK
The Ministry of FinanceMerrill Lynch
SBABSHB
ÖhmansThe Riksbank
Sources: Consensus Economics Inc, the Ministry of Finance, the Swedish Trade Union, Statistics Sweden and the Riksbank
Figure 26. Forecasts for GDP 2006 made at different points in time
Annual average
Sources: Consensus Economics Inc, the Ministry of Finance, the Swedish Trade Union, Statistics Sweden and the Riksbank
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
IR 05:1 IR 05:2 IR 05:3 IR 05:4 IR 06:1 IR 06:2 IR 06:30.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Other forecastersThe RiksbankOutcome
Figure 27. Forecasts for GDP 2007 made at different points in time
Annual average
Sources: Consensus Economics Inc, the Ministry of Finance, the Swedish Trade Union, Statistics Sweden and the Riksbank
0
1
2
3
4
5
IR05:4 IR06:1 IR06:2 IR06:3 MPR07:1 MPR07:2 MPR07:3
0
1
2
3
4
5
Other forecasters
The Riksbank
Forcast MPR 2008:1
Table 2. Inflation forecasts in 2005, 2006 and 2007
Annual average
Sources: Statistics Sweden and the Riksbank
IR 05:1 IR 05:1 IR 05:2 IR 05:2 IR 05:3 IR 05:4 IR 06:1 IR 06:2 IR 06:3 MPR 07:1 MPR 07:2 MPR 07:3 MPU Dec Outcome
CPI 2007 2.11) 2.4 1.81) 1.9 2.1 2.1 2.1 2.3 2 1.5 2.1 2.1 2.2 2.2 CPIX 2007 2.01) 1.9 1.61) 1.6 1.6 1.6 1.5 1.6 1.3 0.7 1.1 1.1 1.2 1.2 GDP growth 2006 3.2 2.7 2.7 2.6 3 3.2 3.5 3.7 4.3 4.5 4.2 4.2 4.1 4.1 GDP growth 2007 2.8 2.3 2.7 2.4 2.5 2.5 2.8 2.8 3.1 3.5 3.1 3.1 2.6
Note. 112-month rateThe forecast figures in the grey-coloured fields are the main scenarios in the reports IR05:1, IR05:2 which are based on the assumption that the repo rate remains unchanged during the forecast period. The forecast figures in the white-coloured fields for IR05:1 and IR05:2 are based on the assumption that the repo rate develops in line with a 15-day average of the so-called implied forward rates. The forecast figures from IR05:3, IR05:4, IR06:1, IR06:2 and IR06:3 are based on the assumption that the repo rate develops in line with a 15-day average of the so-called implied forward rates; this was the main scenario in these reports. The forecast figures from MPR07:1, MPR07:2, MPR07:3 and MPU are based on the assumption that the repo rate develops in line with the Riksbank’s repo rate forecast which was presented in the respective reports.
Figure 28. Repo rate outcome and implied forward rates 2005
Per cent
0
1
2
3
4
2004 2005 2006 2007
0
1
2
3
4
IR05:3Repo rateIR05:4
Source: The Riksbank
Figure 29. Repo rate outcome and implied forward rates 2006
Per cent
0
1
2
3
4
2004 2005 2006 2007
0
1
2
3
4
Repo rateIR06:1IR06:2IR06:3
Source: The Riksbank
Figure 30. Repo rate forecasts at different times 2007
Per cent
0
1
2
3
4
5
04 05 06 07 08 09 10
0
1
2
3
4
5Repo rateMPR 07:1MPR 07:2MPR 07:3MPU Dec
Source: The Riksbank
Figure 31. Repo rate outcome, repo rate forecasts and implied forward rates at
some points in timePer cent
0
1
2
3
4
5
07 08 09
0
1
2
3
4
5
Based on bank securities/FRA 5 February 2007Based on bank securities/FRA 4 June 2007Repo rate MPR 07:1MPR 07:2
Source: The Riksbank
Table 3. Outcomes and forecasts made for different variables during
2005, 2006 and 2007Annual average unless otherwise stated
Sources: OECD, Statistics Sweden and the Riksbank
IR 05:1 IR 05:1 IR 05:2 IR 05:2 IR 05:3 IR 05:4 IR 06:1 IR 06:2 IR 06:3 MPR 07:1 MPR 07:2 MPR 07:3 MPU Dec Outcome
GDP growth 2006 3.2 2.7 2.7 2.6 3 3.2 3.5 3.7 4.3 4.5 4.2 4.2 4.1 4.1 GDP growth 2007 2.8 2.3 2.7 2.4 2.5 2.5 2.8 2.8 3.1 3.5 3.1 3.1 2.6 GDP OECD 19 2006 2.8 2.8 2.6 2.6 2.4 2.4 2.5 2.8 3.2 3) 3.2 3) 3.2 3) 3 3) 3 3) 3 3) GDP OECD 19 2007 2.7 2.7 2.7 2.7 2.6 2.5 2.5 2.5 2.6 3) 2.7 3) 2.6 3) 2.5 3) 2.7 3) TCW 2007 122.5 123.2 124.4 125.4 124.5 126.5 125.4 124 124.8 124.9 125.2 Production in the business sector 2006 2.3 2.3 2.7 2.7 2.8 2.6 3.3 3.4 Productivity in the whole economy 2007 2.12) 2.12) 2.5 2) 2.5 2) 2.6 2) 2.5 2) 1.9 1.7 1 0.1 Wages in the whole economy. 2007 (Hourly wage, NMO) 4.22) 3.92) 3.9 2) 3.9 2) 3.9 2) 3.9 2) 3.8 3.8 3.9 3.9 Unit labour costs in the business sector 2006 2.1 1.9 1.1 1.1 1 0.2 -0.7 -0.1 Unit labour costs in the whole economy 2007 2.22) 1.92) 1.8 2) 1.8 2) 1.7 2) 2.9 2) 2.9 2.8 4.2 4.8 Employed 2006 1.4 0.7 1.1 1.1 1.5 1.7 1.9 1.9 1.9 1.8 1.8 Employed 2007 1.2 0.9 0.6 0.6 0.6 1 1.1 2.1 2.3 2.6 2.4 Open unemployment 20074) 4.4 4.9 5 5 5 5.5 5.4 5.4 5.4 5.4 5.4 Open unemployment 20074) 4 4.5 4.6 4.6 4.8 5.1 5.4 5.1 4.7 4.6 4.6 CPI 2007 2.11) 2.4 1.81) 1.9 2.1 2.1 2.1 2.3 2 1.5 2.1 2.1 2.2 2.2 CPIX 2007 2.01) 1.9 1.61) 1.6 1.6 1.6 1.5 1.6 1.3 0.7 1.1 1.1 1.2 1.2 CPIX excl. energy 2007 1.3 1.2 1.3 1.4 1.4 1.5
Note. 112-month rate, 2)in the business sector, 3)the whole of the OECD, 4per cent of labour force. The forecast figures in the grey-coloured fields are the main scenarios in the reports IR05:1, IR05:2 which are based on the assumption that the repo rate remains unchanged during the forecast period. The forecast figures in the white-coloured fields for IR05:1 and IR05:2 are based on the assumption that the repo rate develops in line with a 15-day average of the so-called implied forward rates. The forecast figures from IR05:3, IR05:4, IR06:1, IR06:2 and IR06:3 are based on the assumption that the repo rate develops in line with a 15-day average of the so-called implied forward rates; this was the main scenario in these reports. The forecast figures from MPR07:1, MPR07:2, MPR07:3 and MPU are based on the assumption that the repo rate develops in line with the Riksbank’s repo rate forecast which was presented in the respective reports.
