Economic Survey 2-2011

Global economic developments provide a mixed picture. Growth in most OECD countries is moderate, but since the beginning of the year, growth has slowed in the USA and the government debt crisis in Europe has become more serious. In Europe, the tendency is for northern countries to manage relatively well, while southern countries are having a difficult time. The Japanese economy suffered a setback with the earthquake disaster in March, but was already struggling before this. Growth in emerging economies, on the other hand, is high, but capacity problems and high inflation are a growing problem. These countries have been a key driving force in the global economy since the financial crisis, which has contributed to a sharp rise in commodity prices. Consumer price inflation has risen markedly in most countries, particularly in emerging economies. The high inflation internationally is probably due to transient factors. The increase in food and oil prices has levelled off, and we do not expect a sharp rise in prices for these products in the near future. Given low capacity utilisation and moderate growth prospects in the OECD countries, we expect inflation to slow as early as in the autumn of this year. The European Central Bank has begun raising interest rates, while the Federal Reserve has signalled that it will monitor developments for a while yet.