Download - Executive Board meeting 3 November 2004
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Norges Bank
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Executive Board meeting3 November 2004
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Norges Bank
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Economic developments
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Norges Bank
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Industrial output in the US, Japan and the euro areaThree-month moving average. Seasonally adjusted. Volume
-5
-4
-3
-2
-1
0
1
2
3
4
5
1997 1998 1999 2000 2001 2002 2003 2004
-5
-4
-3
-2
-1
0
1
2
3
4
5
Sources: EcoWin/Federal Reserve Board, Ministry of Economy,Trade and Industry and EUR-OP/EUROSTAT
US
Japan
Euro area
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Norges Bank
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Employment in the US, Japan, Germany, the UK and Sweden. 12-month rise
-2
-1
0
1
2
3
4
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
-2
-1
0
1
2
3
4
Source: EcoWin/National statistics
US Sweden
Germany
Japan
UK
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Norges Bank
5Source: EcoWin / National Bureau of Statistics China
China - GDPSo far this year. Percentage change on same month previous year
0
3
6
9
12
15
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
0
3
6
9
12
15
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Norges Bank
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Prices for some important commodities, measured in USD. Index. 2.1.2003 = 100. Daily figures
60
100
140
180
220
260
Jan 03 May 03 Sep 03 Jan 04 May 04 Sep 04
60
100
140
180
220
260
Sources: Norges Bank and Ecowin/ London Metal Exchange, The Economist
Copper
Aluminium
Oil
NickelLead
Zinc
The Economist's commodity price index
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Norges Bank
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Interest rate expectations Actual developments and expected key rate1) at 24 June and 28 October 2004. 2 January 2003 – 1 August 2006
0
1
2
3
4
5
6
2003 2004 2005 2006
0
1
2
3
4
5
6
UK
Euro area
US
24 June28 October
1) FRA and futures contracts adjusted for the estimated difference between 3-month money market rates and the key rate.
Sources: Bloomberg, Reuters and Norges Bank
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Norges Bank
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Forward interest rates29 October 2004. Implied short-term forward rates
0
1
2
3
4
5
6
2004 2006 2008 2010 2012 2014
0
1
2
3
4
5
6
Norway Euro area UK US
Source: Norges Bank
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Norges Bank
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Oil price Brent Blend USD per barrel. Daily figures
0
10
20
30
40
50
60
2002 2003 2004 2005 2006 2007
0
10
20
30
40
50
60
Sources: Norges Bank, Telerate and IPE
Futures prices 24 June (IR 2/04)
28 October
10 September
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Norges Bank
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Spread Brent-Dubai and WTI-Brent14-day moving average. USD per barrel
-2
0
2
4
6
8
10
12
14
2001 2002 2003 2004
-2
0
2
4
6
8
10
12
14
Sources: EcoWin AB
Spread Brent and Dubai
Spread WTI and Brent
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Norges Bank
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Oil futures pricesUSD per barrel light crude. Daily figures
10
20
30
40
50
60
2001 2002 2003 2004
10
20
30
40
50
60
Sources: Norges Bank and EcoWin/NYMEX
Delivery in 6-7 years
Delivery in 1 month
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Norges Bank
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OPEC 10 spare capacityMillion barrels per day
0
1
2
3
4
5
6
7
8
2000 2001 2002 2003 2004
0
1
2
3
4
5
6
7
8
Sources: EIA (annual figures) and IEA (monthly figures)
Monthly figures
Annual figures
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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 2/04 (broken line).12-month rise. Per cent
-5
-4
-3
-2
-1
0
1
2
3
Jul 03 Oct 03 Jan 04 Apr 04 Jul 04 Oct 04
-5
-4
-3
-2
-1
0
1
2
3
Sources: Statistics Norway and Norges Bank
Goods and services produced in Norway (0.7)
1) Norges Bank's estimates
Imported consumer goods (0.3)
CPI-ATE
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Norges Bank
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85
90
95
100
105
Jan 02 Jun 02 Nov 02 Apr 03 Sep 03 Feb 04 Jul 04
85
90
95
100
1051)A rising curve denotes a stronger krone exchange rate
Source: Norges Bank
Developments in the krone exchange rate1) (I-44)Daily figures. 1 January 2002 – 1 November 2004
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Norges Bank
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House pricesNEF/ECON (Januar 1998–October 2004) and SN (98 Q1– 04 Q3). Percentage rise on same period previous year
-5
0
5
10
15
20
25
30
1998 1999 2000 2001 2002 2003 2004
-5
0
5
10
15
20
25
30
Sources: Statistics Norway (SN), Norw. Association of Real Estate Agents (NEF), Association of Real Estate Agency Firms
SN
NEF
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Norges Bank
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Building starts - dwellings and other buildings1000 m2 per month. Trend. January 2000 - August 2004
100
150
200
250
300
350
400
2000 2001 2002 2003 2004
100
150
200
250
300
350
400
Housing starts
Other building starts
Source: Statistics Norway
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Norges Bank
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Price index for office and commercial propertyIndex 2000 = 100. 1st half of 1996 – 1st half of 2004
60
70
80
90
100
110
120
130
1996 1997 1998 1999 2000 2001 2002 2003 2004
60
70
80
90
100
110
120
130
Source: Statistics Norway
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Norges Bank
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Credit from domestic sources to households and non-financial enterprises (C2). Percentage growth on same month previous year. August 2001 – September 2004
-3
0
3
6
9
12
15
Aug 01 Jan 02 Jun 02 Nov 02 Apr 03 Sep 03 Feb 04 Jul 04
-3
0
3
6
9
12
15
C2 non-financial enterprises
Source: Norges Bank
C2 total
C2 households
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Norges Bank
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0
3
6
9
12
15
0
3
6
9
12
15
Local government revenues, underlying spending growth over the central government budget and mainland GDP Percentage change in value from 2003 to 2005
Source: National Budget 2005
Local governmentRevenues Spending
Central governmentGDP
Mainland Norway
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Norges Bank
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Developments in employment and output
four quarters after the start of a cyclical upturn1). Mainland Norway. Per cent
0
1
2
3
4
0
1
2
3
4
1) We have assumed that the previous cyclical upturns began in 1982 Q4 and 1991 Q4. The current cyclical upturn started in 2003 Q2.
Mainland GDP
Previous
Now
PreviousNow
Number employed
Sources: Statistics Norway and Norges Bank
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Norges Bank
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0
1
2
3
4
5
6
7
8
2001 2003 2005 200780
85
90
95
100
105
110
2001 2003 2005 2007
3-month money market rate
Forward interest rate 28 Oct (IR 3/04)
Source: Norges Bank
Import-weighted exchange rate, I-44
Forward exchange rate 28 Oct (IR
3/04)
1) A rising curve denotes a weaker krone exchange rate
Assumptions for money market rates and the krone exchange rate I-441)
(forward interest rate and forward exchange rate)
Forward interest rate 24 June (IR 2/04)
Forward exchange rate 24 June
(IR 2/04)
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Norges Bank
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Projections and uncertainty for CPI-ATE1)
12-month rise. Per cent. January 2001– December 2007
0
1
2
3
4
5
2001 2002 2003 2004 2005 2006 2007
0
1
2
3
4
530% 50% 70% 90%
1) The bands in the fan indicate different probabilities for developments in the CPI-ATE.
Sources: Statistics Norway and Norges Bank
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Norges Bank
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Projections for the CPI-ATE1) and the output gap2)
Inflation Report 2/04 (blue) and 3/04 (red). Per cent
-2
-1
0
1
2
3
-2
-1
0
1
2
3
2002 2003 2004 2005 2006 2007
1) CPI-ATE: CPI adjusted for tax changes and excluding energy products2) The output gap measures the difference between actual and trend mainland GDP
CPI-ATE
Output gap
IR 2/04IR 3/04
Sources: Statistics Norway and Norges Bank
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Norges Bank
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Projections for main macroeconomic aggregates IR 3/04
Source: Norges Bank
2004 2005 2006 2007
Mainland demand 4¼ 4 3½ 2¼
Private consumption 5 4½ 3¾ 2½
Public consumption 2 1¾ 1½ 1½
Gross investment 5¾ 5 5 2¾
Petroleum investment 12½ 15 5 -7½
Traditional exports 4 4½ 3 3
Imports 8½ 6 4 1¾
Mainland GDP 3¾ 3½ 2¾ 2
Employment ¼ 1¼ 1 ¼ ½
LFS unemployment (rate) 4½ 4 3¾ 3¾
CPI-ATE ¼ 1½ 1¾ 2¼
Annual wage growth 3¾ 4½ 4¾ 4¾
Output gap mainland Norway - ¼ ¾ 1 ½