Ingves at the Riksdag Committee on Finance: Monetary policy supporting recovery and inflation

At the same time, Mr Ingves pointed out that the recovery that has now begun is divided. Several service sectors, which employ many young people and people born abroad, are still severely affected. There is considerable uncertainty, and future developments are dependent not least on the progress of the vaccination process. But unlike many other crises, GDP is expected to gradually return to the pre-crisis level. This is partly because of the different nature of this crisis, but also because of the substantial economic policy measures implemented to deal with it.

Mr Ingves pointed out that “the various measures taken by the Riksbank and other central banks have meant that we have avoided the health crisis developing into a financial crisis.” The credit supply has continued to function and interest rates faced by households and companies have been kept at low levels. “Without the measures, the crisis would have been even worse for households and companies, and in particular unemployment would have been higher. But there is still considerable uncertainty, and monetary policy needs to remain expansionary to facilitate the recovery and contribute to inflation rising towards the target,” said Mr Ingves.