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04.02.2009
1
Executive Board meeting4 February 2009
Difference between money market rates and expected key ratesPercentage points. 5-day moving average1 June 2007 – 2 February 2009
3 5
43 mth US3 mth Euro area 3
4 12 mth US12 mth Euro area
1,5
2
2,5
3
3,5 3 mth Euro area3 mth UK3 mth Norway
1,5
2
2,5
3
3,5 12 mth Euro area12 mth UK12 mth Norway
0
0,5
1
Jun-07 Dec-07 Jun-08 Dec-080
0,5
1
Jun-07 Dec-07 Jun-08 Dec-08
2
Sources: Bloomberg, Thomson Reuters and Norges Bank
04.02.2009
2
500500CitigroupBank of America
S
Price of credit default insurance Large international banks. 5-year CDS prices. Basis points 1 January 2007 – 2 February 2009
200
300
400
200
300
400 UBSHSBCDnB NORRoyal Bank of Scotland
0
100
0
100
Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08Source: Bloomberg
Equity markets Indices. 1 January 2007 – 2 February 2009
140
160
140
160
40
60
80
100
120
140
40
60
80
100
120
140
Euro areaJapan
0
20
40
0
20
40
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09
NorwayEmerging economiesUS
4
Source: Thomson Reuters
04.02.2009
3
140
160
140
160Spot29.10.2008 350
400
350
400Industrial metalsTotal
Oil price (Brent Blend)USD per barrel. Daily figuresJanuary 2000 – October 2011
Commodity pricesIn USD. IndexWeek 1 2002 – week 5 2009
60
80
100
120
140
60
80
100
120
14017.12.200802.02.2009
150
200
250
300
350
150
200
250
300
350Food
0
20
40
0
20
40
2002 2004 2006 2008 2010
50
100
150
50
100
150
2002 2004 2006 2008
5
Sources: Thomson Reuters and Norges Bank
6
Source: New York Times 16.1.2009
04.02.2009
4
Manufacturing productionVolume. Seasonally adjusted. Quarterly change. Per cent 1970 Q1 – 2008 Q4
1010Japan UK Euro area US1) 1)
-5
0
5
-5
0
5
-15
-10
-15
-10
1970 1975 1980 1985 1990 1995 2000 2005
7
Source: Reuters EcoWin1) 2008 Q4 is calculated as an average of the numbers for October and November
Growth projections for 2009 Projected by the IMF at different points in time
5
6
7Projections OctoberProjections NovemberProjections January 09
0
1
2
3
4
5
-3
-2
-1
World Advanced Economies Emerging economies
8
Source: The IMF
04.02.2009
5
Fiscal measures for 2009
Fiscal stimulus in 2009 t f GDP1)as percentage of GDP1)
(Estimates in Report to the Stortingno. 37)
Euro area 0.9Germany 1.5UK 2.6Sweden 1.9Denmark 2.7
9
1) Change in structural budget balance as percentage of GDP
Source: Report to the Storting no. 37 (2008-2009).
General government fiscal balancesPercentage of GDP. 2000 – 2010
22
-4
-2
0
-4
-2
0
Advanced economies
-8
-6
-8
-6
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Advanced economies
World
Emerging and developing economies
10
Source: IMF Staff estimates
04.02.2009
6
Developments in 5-year government bond yields Spread between various countries and Germany. Percentage points. 1 June 2007 – 2 February 2009
3,5
4
3,5
4Spain
The Netherlands
1
1,5
2
2,5
3
1
1,5
2
2,5
3 Ireland
Greece
France
0
0,5
1
0
0,5
1
Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
11
Source: Thomson Reuters
Actual and expected key ratesPer cent. 1 January 2003 – 2 February 2009
6
7
6
7US Euro area Norway UK Market after previous
monetary policy meeting (17 Dec 08)
2
3
4
5
2
3
4
5 2 February 2009
0
1
0
1
Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
12
Sources: Thomson Reuters and Norges Bank
04.02.2009
7
4
585
88 I-44
3-month interest rate differentialand import-weighted exchange rate (I-44)1)
January 2002 – December 2011
0
1
2
3
488
91
94
97
100
I 44 (left-hand scale)
2 February 2009
2 February 2009
13
-2
-1
0100
103
1062002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Sources: Thomson Reuters og Norges Bank
Weighted interest rate differential(right-hand scale)
17 December 2008
1) A rising curve denotes an appreciation of the krone.
11
12
11
12
EURNOK sample space for NOK exchange rate aheadBased on 1-month currency option prices. Per cent 3 January 2008 – 2 February 2009
8,639
10
11
9
10
11
12 September 2008
7,65
7
8
7
8
Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10
14
Source: Thomson Reuters
04.02.2009
8
11
12
11
12
EURNOK sample space for NOK exchange rate aheadBased on 1-month currency option prices. Per cent 3 January 2008 – 2 February 2009
8,63
10,35
9
10
11
9
10
11
2 February 2009
12 September 2008
7,65 7,71
7
8
7
8
Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10
15
Source: Thomson Reuters
CPI and CPIXE1)
12-month change. Per cent. January 2006 – December 2008
5
6
5
6
CPI CPIXE
1
2
3
4
1
2
3
4
16
Sources: Statistics Norway and Norges Bank
-1
0
-1
0
2006 2007 2008 20091) CPI adjusted for tax changes and excluding temporary changes in energy prices.
04.02.2009
9
CPI-ATE1)
Total and by supplier sector2). 12-month change. Per centJanuary 2004 – December 2008
456
456
-2-10123
-2-10123
Domestically produced goods and services (0.7)
Imported consumer goods (0.3)
CPI-ATE
17
-5-4-3
-5-4-3
2004 2005 2006 2007 2008 2009
Sources: Statistics Norway and Norges Bank 1) CPI adjusted for tax changes and energy products.2) Norges Bank’s estimates.
Employment (LFS)In 1000s. Seasonally adjusted. January 2007 – November 2008
25502550
2400
2450
2500
2400
2450
2500
2350
2400
2350
2400
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08
18
Source: Statistics Norway
04.02.2009
10
UnemploymentLFS unemployment, registered unemployed, and registered unemployed and on labour market programmesPer cent. Seasonally adjusted. February 1997 – November 2008
1010LFS unemployment
4
6
8
4
6
8Registered unemployed and on labour market programmesRegistered unemployed
0
2
0
2
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
19
Sources: Statistics Norway, Norwegian Labour and Welfare Administration (NAV) and Norges Bank
Index of commodity consumption Volume. January 2004 = 100. Seasonally adjustedJanuary 2004 – December 2008
130
140
130
140
100
110
120
100
110
120
80
90
80
90
Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09Sources: Statistics Norway and Norges Bank
04.02.2009
11
Industrial confidence indicator1)
Seasonally adjusted diffusion index. 1988 Q1 – 2008 Q4
2020
-10
0
10
-10
0
10
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008-30
-20
-30
-20
21
Source: Statistics Norway1) Based on production expectations, stocks of finished goods and total stocks of orders
House prices and credit to households12-month change. Per cent. January 2001 – January 2009
20
25
20
25
14
16
14
16House prices Credit to households (C2)
0
5
10
15
20
0
5
10
15
20
4
6
8
10
12
14
4
6
8
10
12
14
22
-10
-5
-10
-5
2001 2003 2005 2007 20090
2
4
0
2
4
2001 2003 2005 2007Sources: Norwegian Association of Real Estate Agents, Assosiation of Real Estate
Agency Firms, FINN.no, ECON Pöyry and Norges Bank
04.02.2009
12
Market prices for commercial property and corporate debtAnnual rise in market prices and twelve-month change in debt. Per cent January 2001 – December 2008
6060 3030Market prices for commercial property1) Corporate debt
0
10
20
30
40
50
0
10
20
30
40
50
5
10
15
20
25
5
10
15
20
25
23
-30
-20
-10
-30
-20
-10
2001 2003 2005 2007-5
0
5
-5
0
5
2001 2003 2005 2007Sources: Statistics Norway, OPAK and Norges Bank
1) High-standard offices centrally located in Oslo.
Change in credit standards for loans to householdsPer cent
80100
80100
Factors affecting credit standards
60-40-200204060
60-40-20
0204060 Credit standards
Economic outlook Banks’ appetitefor risk Default
08 Q3
08 Q4
09 Q1
08 Q3
08 Q4
09 Q1
08 Q3
08 Q4
09 Q1
08 Q3
08 Q4
09 Q1
-100-80-60
-100-80-60
24
Source: Norges Bank
04.02.2009
13
80100
80100
Factors affecting credit standards
Change in credit standards for non-financialcorporationsPer cent
60-40-200204060
60-40-20
0204060
Economicoutlook
Banks’ appetitefor risk
Capital-
adequacy
FundingCredit standards
08 Q3
08 Q4
09 Q1
08 Q3
08 Q4
09 Q1
08 Q4
09 Q1
08 Q3
08 Q4
09 Q1
08 Q3
08 Q4
09 Q1
-100-80-60
-100-80-60
25
Source: Norges Bank
The Government’s stimulus package
• NOK 20 bn stimulus package• Increased expenditure (NOK 16 75 bn)• Increased expenditure (NOK 16.75 bn)
• local government• transport and communications projects• other building projects
• Tax cuts for the business sector (NOK 3.25 bn)
• Expansion of lending guarantee and investment schemes• Expansion of lending, guarantee and investment schemes(NOK 8 bn)
26
04.02.2009
14
Expected real return on the Government Pension Fund – Global and structural non-oil deficitIn billions of 2009-NOK. 2001 – 2009
120
140
120
140Structural deficit, stimulus package 2009
40
60
80
100
120
40
60
80
100
120 Structural non-oil deficit
4 pct. real return
0
20
0
0
20
0
2001 2002 2003 2004 2005 2006 2007 2008 2009
27
Sources: National Budget for 2009 and Report to the Storting no. 37 (2008-2009).
Costs of money market funding and long-term fundingPer cent. Weekly figures. 3 January 2007 – 29 January 2009
1212Premium on long-term funding (5-year bank bond)
1)
4
6
8
10
4
6
8
10 Difference between 3-month money market rate and key policy rate
Key policy rate
1)
0
2
0
2
Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08
28
1) Effective 3-month NIBOR Sources: DnB NOR Markets and Norges Bank
04.02.2009
15
Key policy rate, money market rate1) and banks’ weighted lending rate on new loans2)
Per cent. 1 June 2007 – 2 February 2009
8
9
8
9Money market rateM t t
3
4
5
6
7
8
3
4
5
6
7
8 Mortgage rateKey policy rate
0
1
2
0
1
2
Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08
29
1) 3-month NIBOR.2) Interest rates on new mortgage loans of NOK 1m within 60% of purchase price with variable interest rate. Figures for the 20 largest banks, weighted according to market share.
Sources: Norsk familieøkonomi ASand Norges Bank
8
9
8
9
Key policy rateActual developments, projection and strategy interval. Per cent
3
4
5
6
7
3
4
5
6
7
1/053/042/05 3/05
1/062/06
3/06
2/071/07
3/07 1/08 2/08
3/08Strategy interval: 2 – 3 per cent
0
1
2
0
1
2
2005 2006 2007 2008 2009 2010 2011
30
3/0
Source: Norges Bank
Projection17 December 2008