Norges Bank

1

Executive Board meeting15 March 2007

Norges Bank

2

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

Norges Bank

3

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

Norges Bank

4

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

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

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

Norges Bank

7

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

Norges Bank

8

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

Norges Bank

9

-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

Norges Bank

10

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

Norges Bank

11

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

Norges Bank

12

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

Norges Bank

13

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

Norges Bank

14

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

Norges Bank

15

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).

Norges Bank

16

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).

Norges Bank

17

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

Norges Bank

18

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)

Norges Bank

19

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.

Norges Bank

20

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

Norges Bank

21

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

Norges Bank

22

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

Norges Bank

23

Executive Board meeting15 March 2007