Norges Bank
Executive Board Meeting
25 May 2005
1
Norges Bank
GDP growth among trading partners
Growth in volume on previous year. Per cent. Actual and projected
10
10
China1)
8
8
6
6
Global 1)
4
4
2
2
25 trading partners2)
0
0
1999
2000
2001
2002
1)
2003
Source: IMF
2004
2005
2006
2)
Source: Norges Bank
2
Norges Bank
Quarterly change in GDP
US, euro area and UK
Growth in volume, annualised. Seasonally adjusted. Per cent
8
8
6
4
6
US
4
UK
2
2
0
0
Euro area
Japan
-2
-2
-4
-4
-6
2001 Q1
-6
2002 Q1
2003 Q1
2004 Q1
2005 Q1
Sources: Eurostat, EcoWin\ Office for National Statistics, Bureau of Economic Analysis and Norges Bank
3
Norges Bank
China
• GDP grew 9.5 per cent from 2004 Q1 to 2005 Q1
– Growth somewhat more balanced, but still strong
investment growth
– Growing export surplus
• Increased pressure on China to revalue
4
Norges Bank
Forward exchange rate (12-month) Chinese yuan
A rising value denotes a depreciating currency. 1.1 2003 – 24.5 2005
8.4
8.4
8.3
8.3
8.2
Fixed exchange rate
against USD
8.1
8
8.2
8.1
8
7.9
7.9
Forward exchange
rate against
USD (12-month)
7.8
7.8
7.7
7.7
7.6
7.6
7.5
2003
7.5
2004
2005
Source: Bloomberg
5
Norges Bank
Developments in international equity indices
Total return. Indexed, 01.01.04 = 100
160
160
Norway, OSEBX
140
140
Europe, Stoxx
120
120
Japan, Topix
US, S&P 500
100
80
Jan 04
100
Since previous monetary
policy meeting
May 04
Sep 04
Jan 05
80
May 05
Source: EcoWin
6
Norges Bank
Developments in 10-year government bond yields
5
5
4.5
4.5
US
4
4
Norway
3.5
3.5
Germany
3
Jan 04
3
May 04
Sep 04
Jan 05
May 05
Source: EcoWin
7
Norges Bank
CPI/HICP (core) in the US, the euro area, and Japan
Percentage change on same month previous year
3
3
US
2
2
US1)
1
Euro area
0
1
0
Japan
-1
-1
1)
Personal consumption expenditures less food and energy
-2
1998
-2
1999
2000
2001
2002
2003
2004
2005
Source: EcoWin / National statistics
8
Norges Bank
CPI/HICP (core)1) in the UK, Sweden and Denmark
Percentage change on same month previous year
4
4
Sweden
3
3
Denmark
2
2
1
1
UK
0
0
1)
Excl. energy, food, alcohol and tobacco products
-1
1998
-1
1999
2000
2001
2002
2003
2004
2005
Source: EcoWin / National statistics
9
Norges Bank
Interest rate expectations 23 May 2005
6
5
6
5
UK
Norway
4
4
Sweden
3
3
2
2
Euro area
1
1
US
0
Jun 03
0
Dec 03
Jun 04
Dec 04
Jun 05
Dec 05
Jun 06
Sources: Norges Bank and Reuters
10
Norges Bank
Oil price Brent Blend and futures prices
Daily figures, USD per barrel. January 2002 - May 2005
55
20 April
50
55
50
23 May
45
IR 1-05
45
40
40
35
35
30
30
25
25
20
20
15
2002
15
2003
2004
2005
2006
2007
Sources: Telerate, IPE and Norges Bank
11
Norges Bank
Oil futures prices
USD per barrel light crude. Daily figures. January 2001 – May 2005
60
60
55
55
50
50
45
45
40
40
Delivery in 1 month
35
35
30
30
25
Delivery in 6-7 years
25
20
20
15
2001
15
2002
2003
2004
2005
Source: EcoWin/ NYMEX
12
Norges Bank
Global commodity prices, in USD
Weekly figures. Indices, 2000=100
160
160
Metals
140
120
140
Commodities for
manufacturing
120
Agricultural products excl. food
100
100
80
80
60
2002
60
2003
2004
2005
Sources: EcoWin / Economist
13
Norges Bank
CPI-ATE. Total and distributed by imported and
domestically produced goods and services
Historical and projected IR 1/05 (broken line). 12-month rise. Per cent
4
4
3
3
2
Domestically produced goods and services (0.7)
2
1
1
0
0
-1
CPI-ATE
-1
-2
-3
-2
Imported consumer goods (0.3)
-3
-4
-4
-5
-5
Jul 03 Oct 03 Jan 04 Apr 04 Jul 04 Oct 04 Jan 05 Apr 05
Sources: Statistics Norway and Norges Bank
14
Norges Bank
Expected consumer price inflation in 5 years
Per cent. Quarterly figures. 02 Q2 - 05 Q2
4
3
4
Employers' organisations
2
3
Economists
Employees' organisations
2
1
0
Jun 02
1
Dec 02
Jun 03
Dec 03
Jun 04
Dec 04
0
Jun 05
Source: TNS Gallup
15
Norges Bank
Interest rate differential and import-weighted
exchange rate (I-44)
A fall in value denotes a depreciating currency. Daily figures
5
85
4
88
3
91
I-44 (right-hand scale)
2
94
1
97
24 May 05
0
-1
2002
100
Weighted interest rate
differential (left-hand scale)
20 April 05
103
2003
2004
2005
2006
Sources: Norges Bank and Bloomberg
16
Norges Bank
Number of foreigners from new EU countries on
assignments in Norway
6000
5000
1 May 03 - 31 Mar 04
1 May 04 - 31 Mar 05
4000
3000
2000
1000
0
Forign enterprises with Registered employees Registered employees Registered employees
assignments in Norway in foreign enterprises
in Norwegian
in Norwegian and
enterprises
foreign enterprises
Source: Central Office - Foreign Tax Affairs
17
Norges Bank
Growth in retail trade turnover and the retail sales index
On same period previous year, February 2003 – December 2004
10
10
Turnover statistics
8
8
6
6
4
4
2
0
Jan-03
2
Retail sales index
0
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
Kilder: SSB og Norges Bank 18
Norges Bank
Consumer confidence indicator
Unadjusted and trend (level)
Trend
30
30
15
15
0
0
-15
-15
Unadjusted
-30
1992
-30
1994
1996
1998
2000
2002
2004
Source: TNS Gallup
19
Norges Bank
Credith growth
12-month growth. Per cent
25
25
C3 Business sector
Mainland Norway
20
20
C2 Households
C3 Mainland Norway
15
15
10
10
5
5
0
0
-5
1997
-5
1998
1999
2000
2001
2002
2003
2004
2005
Source: Norges Bank
20
Norges Bank
House prices from the real estate business
Annualised 3-month centred moving rise. Seasonally adjusted figures.
Per cent
25
20
15
10
5
0
-5
-10
Jan 02
Jul 02
Jan 03
Jul 03
Jan 04
Jul 04
Jan 05
Sources: Associations of Norwegian real estate agents (NEF, EFF) and Norges Bank
21
Norges Bank
Housing starts (last 12 months)
In thousands
40
40
30
30
20
20
10
10
0
1999
0
2000
2001
2002
2003
2004
2005
Source: Statistics Norway
22
Norges Bank
Commercial building starts
Area (1000 m2)
3-month moving average. Jan 2000 – Jan 2005
100
75
100
Manufacturing
75
Retail trade
50
50
25
25
0
Property management and commercial services
2000
2001
2002
2003
0
2004
2005
Sources: Statistics Norway and Norges Bank
23
Norges Bank
3-month money market rate, import-weighted krone exchange
rate (I-44)1)2), projections for the CPI-ATE and output gap in the
baseline scenario in IR 1/05
Quarterly figures. 2001 Q1 – 2008 Q4
7
6
5
Interest rate
(left-hand
scale)
100
3
3
98
2
2
CPI-ATE
1
1
4
96
3
94
0
0
92
-1
-1
90
-2
2004 2005 2006 2007 2008
-2
2
1
Output gap
Import-weighted
exchange rate (I-44)
(right-hand scale)
0
2004 2005 2006 2007 2008
1) A
2)
rising curve denotes a weaker krone exchange rate.
The figures for 2005 Q1 are based on the average up to 10 March.
Sources: Statistics Norway and Norges Bank
24
Norges Bank
Executive Board Meeting
25 May 2005
25