Norges Bank

1

Executive Board meeting15 December 2004

Norges Bank

2

-1

-0,5

0

0,5

1

1,5

2

2002 2003 2004

-1

-0,5

0

0,5

1

1,5

2

US

UK

Japan Euro area

GDP. Growth in volume on previous quarterPer cent. Seasonally adjusted. 02 Q1 – 04 Q3

Sources: EcoWin, Statistics Japan, National Statistics (UK), EUR-OP/Eurostat, Consensus Economics and Bureau of Economic Analysis (US)

Norges Bank

3

0

1

2

3

4

5

6

2003 2004 2005 2006

0

1

2

3

4

5

6

US

Euro area

UK

Interest rate expectationsActual developments and expected key rate at 28 October and 13 December

28 October13 December

Sources: Reuters and Norges Bank

Norges Bank

4

Core CPI/HICP in the US, the euro area and the UK12-month rise. Per cent. Jan 01 - Oct 04

0

1

2

3

4

2001 2002 2003 2004

0

1

2

3

4

UK

US1)

Euro areaUS2)

1)CPI 2) Personal consumption expenditure deflator, excluding food and energy

Sources: EcoWin/National statistics

Norges Bank

5

International effective exchange ratesIndex. 1999 = 100. Daily figures. 1 Jan 03 – 13 Dec 04

75

85

95

105

115

jan 03 mai 03 sep 03 jan 04 mai 04 sep 04 jan 05

75

85

95

105

115

Norway

UK

1)A rising curve denotes a stronger exchange rate

Sources: Bank of England/EcoWin

US

Euro area

Sweden

Norges Bank

6

Oil price Brent Blend USD per barrel. Daily figures

15

20

25

30

35

40

45

50

55

jan 02 okt 02 jul 03 apr 04 jan 05 okt 05 jul 06 apr 0715

20

25

30

35

40

45

50

55

Sources: Norges Bank, Telerate and IPE

Futures price 28 Oct (IR 3/04)

13 Dec

Norges Bank

7

Oil futures pricesUSD per barrel light crude (West Texas). Daily figures. 1 Jan 01 – 13 Dec 04

15

25

35

45

55

jan 01 aug 01 mar 02 okt 02 mai 03 des 03 jul 0415

25

35

45

55

Sources: Norges Bank and EcoWin/NYMEX

Delivery in 6-7 years

Delivery in 1 month

Norges Bank

8

-4,5

-2,5

-0,5

1,5

3,5

jul 03 okt 03 jan 04 apr 04 jul 04 okt 04 jan 05

-4,5

-2,5

-0,5

1,5

3,5

CPI-ATETotal and broken down into imported and domestically produced goods and services1). Historical price inflation and projections IR 3/04 (broken line).12-month rise. Per cent

Sources: Statistics Norway and Norges Bank

Domestically produced goods and services (0.7)

1) Norges Bank's estimates.

Imported consumer goods (0.3)

CPI-ATE

Norges Bank

9

0

1

2

3

4

jun 02 des 02 jun 03 des 03 jun 04 des 04

0

1

2

3

4

Experts' expectations of consumer price inflation 2 and 5 years aheadPer cent. Quarterly figures. 02 Q2 – 04 Q4

2 years ahead

5 years ahead

Source: TNS Gallup

Norges Bank

10

85

90

95

100

105

jan 02 jul 02 jan 03 jul 03 jan 04 jul 04

85

90

95

100

105

Since previous monetary policy meeting

1)A rising curve denotes a stronger krone exchange rate

Source: Norges Bank

Developments in the krone exchange rate1) (I-44)Daily figures. 1 Jan 02 – 14 Dec 04

Stronger exchange rate

Weaker exchange rate

Norges Bank

11

-1

0

1

2

3

4

5

6

7

jan 03 jul 03 jan 04 jul 04 jan 05 jul 05 jan 06 jul 06

-1

0

1

2

3

4

5

6

7

Sources: Reuters and Norges Bank

Interest rate expectations in Norway. Actual and expected developments in the key rate and the interest rate differential against trading partners at 28 October and 13 December 2004. 2 Jan 03 – 1 Aug 06

Key rate in Norway

Interest rate differential against trading partners

28 October13 December

Norges Bank

12

118

122

126

130

134

138

142

146

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

118

122

126

130

134

138

142

146

Source: Statistics Norway

2003

2002

2004

Index of commodity consumption1995 = 100. Seasonally adjusted volume. Jan 02 - Oct 04

Norges Bank

13

-30

-15

0

15

30

45

1999 2000 2001 2002 2003 2004 2005

-30

-15

0

15

30

45

Total

Sources: TNS Gallup and Norges Bank

Consumer confidence indicatorUnadjusted figures. 99 Q1 – 04 Q4

Personal financial situation

Norwegian economy

Norges Bank

14

Overnight stays at hotelsMonthly figures. Seasonally adjusted 3-month average. Jan 01 - Sep 04

900

1000

1100

1200

1300

1400

1500

jan 86 jan 89 jan 92 jan 95 jan 98 jan 01 jan 04

900

1000

1100

1200

1300

1400

1500

Source: Statistics Norway

Norges Bank

15

Estimated and actual investment in oil and gas extraction and pipeline transport Value. In millions of NOK

20000

30000

40000

50000

60000

70000

80000

90000

100000

May Aug Nov Feb May Aug Nov Actual

20000

30000

40000

50000

60000

70000

80000

90000

100000

2002

2003

20042005

Previous year Same year Final figures

Source: Statistics Norway

Norges Bank

16

Total debt mainland Norway (C3) and domestic debt distributed between households and non-financial enterprises (C2). 12-month rise. Aug 01 – Oct 04

-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

C3 Mainland-Norway

C2 households

Norges Bank

17

Main aggregates in quarterly national accounts and projected main macroeconomic aggregates in Inflation Report 3/04

Annual growth in 2004

Projections in IR 3/2004

Growth from first three quarters in 2003 to first three quarters in 2004

Mainland GDP 3¾ 3.5

Private consumption 5 4.5

Mainland gross investment 5¾ 3.8

Petroleum investment 12½ 9.3

Traditional exports 4 2.7

Imports 8½ 8.1

Sources: Statistics Norway and Norges Bank

Norges Bank

18

2250

2260

2270

2280

2290

2300

2310

2320

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

2250

2260

2270

2280

2290

2300

2310

2320

2003

2002

2004

Employment (LFS)Seasonally adjusted. In 1000s

Source: Statistics Norway

Norges Bank

19

House pricesNEF/ECON (January 1998–November 2004) and Statistics Norway (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

SN

NEF

Sources: Statistics Norway, Norwegian Association of Real Estate Agents (NEF) and Association of Real Estate Agency Firms (EFF)

Norges Bank

20

Projections for the output gap1)

Annual figures. Per cent. 1980 – 2004. Graph from Inflation Report 3/04

-6

-4

-2

0

2

4

6

1980 1985 1990 1995 2000

-6

-4

-2

0

2

4

6

1) The output gap measures the difference between actual and potential mainland GDP.

Sources: Statistics Norway and Norges Bank

Norges Bank

21

80

90

100

110

jan 01 jan 03 jan 05 jan 07

80

90

100

110

Assumptions for the money market rate and the krone exchange rate (I-44)

0

2

4

6

8

10

jan 01 jan 03 jan 05 jan 07

Source: Norges Bank

Forward interest rate28 October (IR 3/04)

3-month money market rate

Import-weighted exchange rate, I-441)Forward interest rate

14 December

1)A rising curve denotes a weaker krone exchange rate.

Forward exchange rate 28 October (IR 3/04)

Forward exchange rate14 December

Norges Bank

22

1

1,1

1,2

1,3

1,4

jan 03 mai 03 sep 03 jan 04 mai 04 sep 04

1

1,1

1,2

1,3

1,4

Source: EcoWin

Movements in EUR/USD1)

Daily figures. 1 Jan 03 – 13 Dec 04

1)A rising curve denotes a weaker dollar exchange rate.

Dollar per euro

Norges Bank

23

Interest rate increases in this business cycle

Sources: Reuters, Bloomberg and Norges Bank

First interest rate increase

Key rate at lowest point

Current key rate

Change since lowest point

Iceland 06.05.2004 5.30 8.25 2.95

New Zealand 29.01.2004 5.00 6.50 1.50

UK 06.11.2003 3.50 4.75 1.25

US 30.06.2004 1.00 2.25 1.25

Australia 08.05.2002 4.25 5.25 1.00

Canada 08.09.2004 2.00 2.50 0.50

Switzerland 17.06.2004 0.00-0.75 0.25-1.25 0.50

Euro area 2.00 2.00 0.00

Sweden 2.00 2.00 0.00

Denmark 2.15 2.15 0.00

Japan Towards zero Towards zero 0.00

Trading partners1) 06.05.2004 2.14 2.33 0.19

1) Calculated as a weighted average of EUR, SEK, GBP and USD. On 31 December 2003 this interest rate was 2.31 per cent.