Download - Executive Board meeting 15 March 2007
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Norges Bank
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Executive Board meeting15 March 2007
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Norges Bank
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2006 2007
Growth forecast Consensus Forecasts
Source: Consensus Forecasts
0
1
2
3
4
5
6
7
8
9
World NorthAmerica
WesternEurope
Japan Asiaexcl.
Japan
EasternEurope
LatinAmerica
Forecasts Oct
Forecasts Jan
Forecasts Feb
0
1
2
3
4
5
6
7
8
9
World NorthAmerica
WesternEurope
Japan Asiaexcl.
Japan
EasternEurope
LatinAmerica
Forecasts Oct
Forecasts Jan
Forecasts Feb
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Norges Bank
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House prices1) and housing starts in the US Seasonally adjusted. 12-month growth2).
January 2003 – January 2007
-30
-20
-10
0
10
20
2003 2004 2005 2006 2007
-30
-20
-10
0
10
20
1) Median price for dwellings2) 3-month moving average
Housing starts
Existing dwellingsNew dwellings
Sources: Reuters EcoWin and Norges Bank
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Norges Bank
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10-year yields in different countries Per cent. 1 January 2006 –12 March 2007
3
3.5
4
4.5
5
5.5
Jan 06 May 06 Sep 06 Jan 07
3
3.5
4
4.5
5
5.5
Source: Reuters EcoWin
Norway
US
Germany
Sweden
UK
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Norges Bank
5Sources: Bloomberg and Norges Bank
4
4.25
4.5
4.75
5
5.25
5.5
5.75
6
1 2 3 4 5 6 7 8 9 10
Years
4
4.25
4.5
4.75
5
5.25
5.5
5.75
6
Government bond yields
Yield curve US13 March 2007
3-month
6-month
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Norges Bank
6Sources: Reuters and Norges Bank
0
1
2
3
4
5
6
Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10
0
1
2
3
4
5
6
US
Euro area 13 March 2007
23 January 2007
Sweden
UK
Policy rates internationally - actual and expected at 23 January and 13 March 2007
Norway
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Norges Bank
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Oil price Brent Blend and futures prices USD per barrel. 3 January 2002 -12 March 2007
10
20
30
40
50
60
70
80
90
2002 2003 2004 2005 2006 2007 2008 2009
10
20
30
40
50
60
70
80
90
Sources: Telerate, IPE and Norges Bank
19 January 2007
12 March 2007
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Norges Bank
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Implied volatility in the foreign exchange market (GRI) and the US equity market (VIX)
2 January 2001 – 13 March 2007
0
10
20
30
40
50
2001 2002 2003 2004 2005 2006 2007
0
10
20
30
40
50
Sources: Reuters (EcoWin) and Norges Bank
Implied volatility in the foreign exchange market
Implied volatility of US equities
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-1
0
1
2
3
4
5
2002 2003 2004 2005 2006 2007 2008 2009 2010
85
88
91
94
97
100
103
Sources: Reuters and Norges Bank
I-44 (right-hand scale)
Weighted interest rate differential (left-hand scale)
22 January 2007
13 March 2007
1) A rising curve denotes an appreciation of the krone.
3-month interest rate differential and import-weighted exchange rate (I-44) 1)
January 2002 – December 2010
Average 1 - 13 March 2007
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Norges Bank
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Various inflation indicators12-month change. Per cent
-2,5
-1,5
-0,5
0,5
1,5
2,5
3,5
4,5
5,5
2002 2003 2004 2005 2006 2007
-2,5
-1,5
-0,5
0,5
1,5
2,5
3,5
4,5
5,5
Source: Statistics Norway
Weighted median
CPI-ATE
20 per cent trimmed mean
CPI
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Norges Bank
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CPI-ATETotal and broken down into imported and domestically produced goods and
services1). Historical price inflation and projections IR 3/06 (broken line).
12-month rise. Per cent
-5
-4
-3
-2
-1
0
1
2
3
Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07
-5
-4
-3
-2
-1
0
1
2
3
Sources: Statistics Norway and Norges Bank
1)The CPI-ATE and CPI-ATED were adjusted for day care rates in 2006
Domestically produced goods and services
Imported consumer goods
CPI-ATE
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2002 2003 2004 2005 2006 2007
25
50
75
100
125
2,200
2,250
2,300
2,350
2,400
2002 2003 2004 2005 2006 2007
Sources: Statistics Norway and Norwegian Labour and Welfare Organisation (NAV)
Labour marketIn 1000s of persons, seasonally adjusted. January 2002 – February 2007
1) The changes to the LFS have resulted in a break in the time series between 2005 and 2006. This affects the seasonally adjusted monthly figures from December 2005 onwards.
LFS unemployment
Registered unemployed
LFS employment1) Unemployment
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Norges Bank
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Business tendency surveyCapacity utilisation in manufacturing. Per cent. 1988 Q1 - 2006 Q4
76
78
80
82
84
86
88
1983 1986 1989 1992 1995 1998 2001 2004
76
78
80
82
84
86
88
Source: Statistics Norway
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Norges Bank
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Order backlogs and new orders in manufacturingUnrevised figures. Index. 1995 = 100. 1993 Q1 - 2006 Q4
50
100
150
200
250
300
1993 1995 1997 1999 2001 2003 2005
50
100
150
200
250
300
Source: Statistics Norway
Order backlogs
New orders
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Norges Bank
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Enterprise sector credit1) and liquid assets2) 12-month growth. Per cent. January 2000 – January 2007
(C3 to December)
-5
0
5
10
15
20
25
30
35
40
2000 2001 2002 2003 2004 2005 2006 2007
-5
0
5
10
15
20
25
30
35
40
Source: Statistics Norway
Total credit (C3)
Money supply (M2)
1) Mainland non-financial enterprises (C3).2) Non-financial enterprises' liquid assets (M2).
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Norges Bank
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Enterprise sector credit1) and liquid assets2) Holdings. In billions of NOK. January 2000 – January 2007
(C3 to December)
0
200
400
600
800
1000
1200
2000 2001 2002 2003 2004 2005 2006 2007
0
200
400
600
800
1000
1200
Source: Statistics Norway
Total credit (C3)
Money supply (M2)
1) Mainland non-financial enterprises (C3).2) Non-financial enterprises' liquid assets (M2).
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Norges Bank
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House prices and household debtPercentage change on same month/quarter previous year. Per cent.
January 2001 - February 2007
-5
0
5
10
15
20
25
2001 2002 2003 2004 2005 2006 2007
6
8
10
12
14
2001 2002 2003 2004 2005 2006 2007
House prices Household debt (C2)
Sources: Norwegian Association of Real Estate Agents, Association of Real Estate Agency Firms, Finn.no, ECON, Statistics Norway and Norges Bank
Real estate industry
Statistics Norway
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Norges Bank
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Household net interest-bearing debt and net financial assets
In billions of NOK. 1997 Q1 – 2006 Q3
0
200
400
600
800
1000
1200
1997 1999 2001 2003 2005
0
200
400
600
800
1000
1200
Source: Statistics Norway
Net interest-bearing debt1)
1) Total debt less bank deposits2) Total assets less total debt
Net financial assets2)
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Norges Bank
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Monetary policy strategy
• The key policy rate should lie in the interval 4
– 5 per cent in the period to the publication of
the next Report on 27 June 2007, conditional
on economic developments that are broadly
in line with the projections.
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Norges Bank
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Projected inflation and output gap in the baseline scenario Per cent. 2005 Q1 – 2010 Q4
-3
-2
-1
0
1
2
3
0
2,5
5
2005 2006 2007 2008 2009 2010
Sources: Statistics Norway and Norges Bank
Output gap
CPI-ATE
CPI
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Norges Bank
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0
2
4
6
8
2005 2006 2007 2008 2009 2010
0
2
4
6
8
Sources: Statistics Norway and Norges Bank
-2
-1
0
1
2
3
2005 2006 2007 2008 2009 2010
-2
-1
0
1
2
3
The baseline scenarios in IR 3/06 and MPR 1/07
IR 3/06
IR 3/06
Output gap Sight deposit rate
MPR 1/07MPR 1/07
0
1
2
3
4
2005 2006 2007 2008 2009 2010
0
1
2
3
4
IR 3/06
CPI-ATE
MPR 1/07
0
1
2
3
4
2005 2006 2007 2008 2009 2010
0
1
2
3
4
MPR 1/07
IR 3/06
CPI
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Norges Bank
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Norges Bank's and the market's path for the overnight deposit rate
At 13 March 2007
3
3.5
4
4.5
5
5.5
6
Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10
3
3.5
4
4.5
5
5.5
6
Market 13 March 2007
Market before IR 3/06 (31 Oct)
Baseline scenario MPR 1/07
Sources: Reuters and Norges Bank
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Executive Board meeting15 March 2007