Charts for Inflation Report
2/2003
Summary
Chart 1 Projected CPI-ATE and output gap1) with a sight
deposit rate of 4 per cent and import-weighted krone
exchange rate equal to the average for 3/6-19/6
(I-44= 93.5). Per cent
3
3
2
CPI-ATE
1
2
1
Output gap
0
0
-1
-1
-2
-2
2002
2003
2004
2005
1) The
output gap is a measure of the difference between actual
and trend output. See box in IR 1/03
Sources: Statistics Norway and Norges Bank
Chart 2 Projected CPI-ATE and output gap1) with
forward interest rate and gradual exchange rate
depreciation of 3 per cent. Per cent
3
3
2
CPI-ATE
1
2
1
Output gap
0
0
-1
-1
-2
-2
2002
2003
2004
2005
1) The
output gap is a measure of the difference between actual
and trend output. See box in IR 1/03
Sources: Statistics Norway and Norges Bank
Chart 3 Projected CPI-ATE with forward interest rate
and gradual exchange rate depreciation of 3 per
cent. 12-month rise. Per cent
4
3
4
Forward interest rate
and forward exchange
rate
CPI-ATE
2
2
Forward interest rate
and forward exchange
rate without impact on
wage growth
1
0
2001
3
1
0
2002
2003
2004
2005
Sources: Statistics Norway and Norges Bank
Chart 1.1 Mainland GDP. In billions of 2000-NOK.
Seasonally adjusted. 1998 Q1 - 2003 Q1
300
300
290
290
280
280
270
270
260
260
250
250
240
1998
240
1999
2000
Source: Statistics Norway
2001
2002
2003
Chart 1.2 Three-month money market rates in the
US and Norway. Jan 1995 - May 2003
10
10
8
8
Norway
6
6
4
4
US
2
0
1995
2
0
1997
1999
Sources: EcoWin and Norges Bank
2001
2003
Chart 1.3 Employed persons according to LFS.
In millions. Seasonally adjusted. Jan 98 - March 03
2.30
2.30
2.28
2.28
2.26
2.26
2.24
2.24
2.22
1998
2.22
1999
2000
Source: Statistics Norway
2001
2002
2003
Chart 1.4 Unemployed (LFS), registered
unemployed and persons participating in labour
market programmes. Percentage of labour force.
Seasonally adjusted1). Jan 95 - May 03
8
8
Registered
unemployed and
labour market
programmes
6
LFS unemployment
4
Registered unemployed
2
0
1995
1) LFS
6
4
2
0
1997
1999
2001
2003
unemployment: 3-month moving average
Sources: Statistics Norway and the Directorate of Labour
Chart 1.5 Annual wage growth in Norway. Including
costs of additional vacation days. Per cent. 19962003
7
7
6
6
5
5
4
4
3
3
2
2
1
1
0
0
1996 1997 1998 1999 2000 2001 2002 2003
Sources: Technical Reporting Committee on Income
Settlements (TRCIS) and Norges Bank
Chart 1.6 Prices for consumer goods adjusted
for tax changes and excluding energy products
(CPI-ATE). Total1) and by supplier sector2).
12-month rise. Per cent. Jan 99 - May 03
6
6
Goods and services produced in Norway
4
4
2
CPI-ATE
0
0
-2
-2
Imported consumer goods
-4
1999
-4
2000
2001
2002
2003
1) Norges
Bank's estimates up to and including July 2000,
thereafter figures published by Statistics Norway
2)
2
Norges Bank's estimates
Sources: Statistics Norway and Norges Bank
Chart 1.7 Prices for some imported consumer goods
adjusted for tax changes. 12-month rise. Per cent.
Jan 99 - May 03
6
6
Cars
3
0
Clothing and
footwear
-3
-6
0
-3
-6
Audio-visual
equipment
-9
-12
1999
3
-9
-12
2000
2001
2002
2003
Sources: Statistics Norway and Norges Bank
Chart 1.8 Prices for some imported consumer goods
adjusted for tax changes. Annual figures. Index.
1990=100
140
140
Footwear
120
120
Domestic appliances
100
80
Clothing
Audio-visual equipment
60
100
80
60
1990 1992 1994 1996 1998 2000 2002
Sources: Statistics Norway and Norges Bank
Chart 1.9 CPI-ATE. Goods and services produced
in Norway. 12-month rise. Per cent.
Jan 99 - May 03
8
8
Services with wages as
dominating price factor
6
6
House
rent
4
4
Other services
2
2
Consumer goods produced in Norway
excluding energy products1)
0
0
1999
1) Excluding
2000
2001
2002
agricultural and fish products
Sources: Statistics Norway and Norges Bank
2003
Chart 1.10 Consumer prices. Total and adjusted for
tax changes and excluding energy products.
12-month rise. Per cent. Jan 99 - May 03
6
6
CPI-AT1)
5
5
4
4
3
3
2
2
CPI
1
0
1999
CPI-ATE1)
1
0
2000
2001
2002
2003
CPI-AT: CPI adjusted for tax changes
CPI-ATE: CPI adjusted for tax changes and excluding energy products
1) Norges
Bank's estimates up to and including July 2000, thereafter
figures published by Statistics Norway
Sources: Statistics Norway and Norges Bank
Chart 1.11 Electricity prices. Index.
1 January 1998=100
350
350
300
300
Spot price including
tax and grid rental
250
250
200
200
150
150
100
50
2000
100
Electricity
in the CPI
50
2001
2002
2003
Sources: Statistics Norway, Nordpool, the Norwegian
Water Resources and Energy Directorate and Norges
Bank
Chart 1.12 Import-weighted exchange rate (I-44),
trade-weighted exchange rate index1) and interest
rate differential against other countries.
Jan 95 - May 03
5
3-month interest rate differential
(left-hand scale)
4
3
90
I-44 (right-hand
scale)
2
100
1
0
TWI (right-hand scale)
-1
-2
1995
1) A rising
80
110
120
1997
1999
2001
curve denotes an appreciation of the krone
Source: Norges Bank
2003
Chart 1.13 The krone exchange rate against EUR
and USD1). Weekly figures. 12 Jan 02 - 19 June 03
6
7
6
NOK against EUR
8
9
7
8
NOK against USD
10
9
10
Jan 02 Apr 02 Jul 02 Oct 02 Jan 03 Apr 03 Jul 03
1) A rising
curve denotes an appreciation of the krone
Source: Norges Bank
Chart 1.14 Effective exchange rates1).
Index. Week 1/2002=100. Weekly figures.
4 Jan 02 -18 June 03
120
120
New Zealand
115
Euro area
115
Iceland
110
110
105
105
Norway
100
95
Jan 02
1) A rising
Australia
Jul 02
100
Canada
Jan 03
95
Jul 03
curve denotes an appreciation of the exchange rate
Source: EcoWin
Chart 1.15 Three-month money market rates and
forward rates, 1995-2013. Monthly figures
8
Actual
Forward
6
8
6
Norway
4
4
Trading partners
2
Difference
0
-2
2
0
-2
95 97 99 01 03 05 07 09 11 13
Source: Norges Bank
Chart 1.16 Developments on the Oslo Stock
Exchange (OSEBX) and 5-year government bond
yields. Daily figures, 01.06.02 -19.06.03
100
7
5-year government bond yields
(right-hand scale)
80
6
5
60
4
OSEBX
(left-hand scale)
40
Jun 02
3
Sep 02
Dec 02 Mar 03
Sources: EcoWin and Norges Bank
Jun 03
Chart 1.17 Strategy intervals for the sight deposit
rate and actual developments. Nov 02 - June 03
8.0
7.5
8.0
Interval in Strategy Document 3/02
7.5
7.0
7.0
6.5
6.5
6.0
Sight deposit rate
6.0
5.5
5.5
5.0
5.0
Interval in Strategy
Document 1/03
4.5
4.0
Nov 02
Jan 03
Source: Norges Bank
Mar 03
May 03
4.5
4.0
Chart 1.18 Interest rate expectations in the US.
Actual developments and expected key rate1)
6
4
6
Key rate
1 July 02
4
24 Oct 02
2
7 Apr 03
2
28 May 03
19 June 03
0
0
1999 2000 2001 2002 2003 2004 2005
1) Based
on Fed Funds futures and Eurodollar futures adjusted for
the estimated spread between 3-month Libor and Fed Funds rates
Source: Norges Bank
Chart 1.19 Interest rate expectations in the euro
area. Actual developments and expected key rate1)
6
6
Key rate
1 July 02
4
2
24 Oct 02
7 Apr 03
28 May 03
4
2
19 June 03
0
0
1999 2000 2001 2002 2003 2004 2005
1) Based
on Euribor futures adjusted for the estimated spread
between 3-month Euribor and Refi rates
Source: Norges Bank
Chart 1.20 Interest rate expectations in Norway.
Actual developments and expected key rate1).
8
8
Key rate
1 July 02
25 Oct 02
6
6
7 Apr 03
4
26 May 03
4
19 June 03
2
1999
2
2000
2001
1) Based
2002
2003
2004
on FRA and currency swap markets, adjusted for
estimated difference in level and credit risk in relation to the sight
deposit rate
Source: Norges Bank
Chart 2.1 GDP growth in the US, Japan, the euro
area and among Norway's trading partners
combined. Seasonally adjusted growth in volume on
previous quarter. Per cent
2
2
US
Japan
Euro area
Trading partners
1
1
0
0
-1
-1
-2
-2
2001
2002
2003
Sources: EcoWin, US Department of Commerce, ESRI
(Japan), EURO-OP Eurostat and Norges Bank
Chart 2.2 The oil price and some financial
market indicators. Index. Week 1 2002 = 100
180
160
140
180
Yield spread speculative
corporate bonds/US
government bonds
Oil price
(Brent Blend)
120
60
Jan 02
140
120
100
80
160
Long-term rates, US
(10-year gov't)
80
Equities US
(Wilshire 5000)
Jul 02
100
60
Jan 03
Sources: EcoWin, IPE, S&P Credit Indices, Wilshire
Associates and Norges Bank
Chart 2.3 Projections for GDP growth among trading
partners in 2003 made at different times
4
4
Consensus Forecasts
3
3
Norges Bank
2
2
1
1
0
Jan 02
0
Jul 02
Jan 03
Jul 03
Sources: Consensus Forecasts and Norges Bank
Chart 2.4 Net wealth/disposable income and
saving ratio in the US. Quarterly figures 19602003. Dashed lines show period averages
7
0
2
6
4
Net wealth/disposable
income (left-hand scale)
6
5
8
10
4
3
1960
Saving ratio (inverted)
(right-hand scale)
1970
1980
1990
12
14
2000
Sources: EcoWin, US Department of Commerce, Federal
Reserve Board and Norges Bank
Chart 2.5 EUR/USD exchange rate.
1 Jan 1999 - 19 June 2003
1.3
1.3
1.1
1.1
0.9
0.9
0.7
1999
0.7
2000
Source: EcoWin
2001
2002
2003
Chart 2.6 Unemployment as a share of the labour
force. Seasonally adjusted. Jan 97 - May 03
15
15
Spain
13
13
Italy
France
11
11
9
9
Germany
7
1997
1999
Euro
area
2001
7
2003
Sources: EcoWin, EUR-OP Eurostat, Federal Labour
Office (Germany), National Employment Agency
(France), Istat (Italy) and Norges Bank
Chart 2.7 Oil price, Brent Blend. USD per barrel.
Daily figures.
40
40
IR 2/03
30
20
Futures prices
19 June 2003
10
0
1999 2000 2001 2002 2003 2004
Sources: Telerate, IPE and Norges Bank
30
20
10
0
Chart 2.8 Historical consumer price inflation and
projections from Norges Bank. Annual percentage
rise 1995-2005
4
4
US
Euro area
2
2
Trading partners
0
0
Japan
-2
1995
1997
1999
2001
2003
-2
2005
Sources: EcoWin, Bureau of Labor Statistics (US),
Ministry of Public Management, Home Affairs, Posts and
Telecom (Japan), EUR-OP Eurostat and Norges Bank
Chart 2.9 Wage growth and rise in prices for
services in the CPI. Percentage change on same
quarter previous year
5
5
4
4
3
Euro area
2
1
3
2
US
Services
in the CPI
Wage growth
1
0
0
1997 1998 1999 2000 2001 2002 2003
Sources: Datastream, EcoWin, EUR-OP
Eurostat and Bureau of Labor Statistics (US)
Chart 2.10 Rise in prices for goods in the CPI.
Percentage change on same quarter previous year
3
3
US, excl. food
and energy
2
Euro area, excl. food
and energy
2
1
1
0
0
-1
-1
-2
UK
Japan
-2
-3
-3
1997 1998 1999 2000 2001 2002 2003
Source: Datastream
Chart 2.11 Historical and expected key rates as of
19 June 20031)
6
6
4
UK
Euro area
2
4
2
US
Japan
0
1999 2000 2001 2002 2003 2004
1) See
further details on calculation of interest rate
expectations in Charts 1.18 and 1.19
Sources: EcoWin, Bloomberg, Bank of England,
Bank of Japan and Norges Bank
0
Chart 3.1 Wage shares. Labour costs as a
percentage of factor income 1993-2002
95
95
85
85
Manufacturing
75
65
75
Other market-oriented mainland
industry
65
55
55
1993
1995
1997
1999
Sources: TRCIS and Statistics Norway
2001
Chart 3.2 Relative labour costs¹): Norway and
trading partners. Deviation from average since 1970.
Per cent. 1970-20032)
15
15
Local currency
0
0
Common currency
-15
-15
1970
1980
1990
2000
1) Hourly
labour costs in manufacturing
for 2003. The estimate for relative labour costs for
2003 in a common currency is based on the exchange rate on 19
June 2003.
2) Estimates
Sources: TRCIS, Ministry of Finance and Norges Bank
Chart 3.3 Business confidence indicator for
manufacturing. Seasonally adjusted diffusion index1).
1990 Q1 - 2003 Q1
15
15
10
10
5
5
0
0
-5
-5
-10
1990 1992 1994 1996 1998 2000 2002
1) A value
-10
of less than 0 implies that the majority of manufacturing
leaders expect a weaker outlook in the next quarter.
Sources: Statistics Norway and Norges Bank
Chart 3.4 Number of bankruptcies and vacancy rate
in the office rental market1). 1991-20032)
12
6000
10
Average vacancy rate in
Oslo (left-hand scale)
5000
8
4000
6
Bankruptcy
proceedings initiated
(right-hand scale)
4
1991
1994
3000
1997
2000
2003
1) Vacancy
2) The
rate in office rental market in Oslo alone
vacancy rate figure for 2003 is as of February
Source: Statistics Norway and Eiendomspar AS
Chart 3.5 Total domestic credit (C2) and credit to nonfinancial enterprises. 12-month growth. Jan 98 - Apr 03
20
20
Credit to
non-financial
enterprises
15
15
10
5
0
1998
10
Total domestic credit
5
0
1999
2000
Source: Norges Bank
2001
2002
2003
Chart 3.6 Household saving ratio and growth in real
disposable income. 1990-2002
8
6
8
Saving ratio
6
4
4
2
2
Real disposable income
0
0
1990 1992 1994 1996 1998 2000 2002
Sources: Statistics Norway and Norges Bank
Chart 3.7 Consumer confidence indicator1).
Unadjusted figures. 1999 Q1 - 2003 Q2
45
45
Personal financial
situation
30
30
15
15
0
0
-15
-30
1999
Country's
economic
situation
Total
-15
-30
2000
1) Provides
2001
2002
2003
an expression of the share with a positive assessment
of the current situation and outlook for the future less the share
with a negative assessment
Source: TNS Gallup
Chart 3.8 House prices and credit to households.
12-month rise. Per cent. Jan 98 - Apr 03
25
25
20
20
15
Credit to households
15
10
10
5
5
House prices
0
-5
1998
0
-5
1999
2000
2001
2002
2003
Sources: Norwegian Association of Real Estate Agents,
Association of Real Estate Agency Firms,
FINN.co, ECON and Norges Bank
Chart 3.9 Household interest burden¹) and debt as
a percentage of disposable income. 1980-2002
170
12
Interest burden
(right-hand scale)
150
130
110
9
6
Debt
(left-hand scale)
90
1980 1984 1988 1992 1996 2000
Interest expenses after tax as a percentage of disposable
income plus interest expenses
1)
Sources: Statistics Norway and Norges Bank
3
0
Chart 3.10 Change in structural non-oil budget
balance1). 1990-2005
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
1990 1992 1994 1996 1998 2000 2002 2004
1) The
budget balance as a percentage of trend mainland GDP;
change on previous year.
Source: Revised National Budget 2003
Chart 3.11 Structural non-oil deficit. Percentage of
trend mainland GDP.
6
6
National Budget 2002
5
4
3
4
Revised National
Budget 2003
3
National Budget 2003
2
5
2
1
1
0
0
2001
2003
2005
Source: The Ministry of Finance
2007
2009
Chart 3.12 Estimates for public consumption 20032004 made at different times. Annual percentage
growth
4
4
3
3
2
1
2004
2003
2
1
0
0
Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03
Source: Norges Bank
Chart 3.13 Job vacancies advertised per business
day. Seasonally adjusted. Jan 00 - May 03
1200
1200
900
900
600
600
300
300
0
2000
0
2001
Source: Directorate of Labour
2002
2003
Chart 3.14 Change in employment on previous year.
Per cent. Unemployment1) as a percentage of the
labour force. 1980-2003
8
4
LFS unemployment
(left-hand scale)
6
2
4
0
2
Employed
(right-hand scale)
-2
-4
0
1980
1) LFS
1985
1990
1995
2000
unemployment
Sources: Statistics Norway and Norges Bank
Chart 3.15 Change in labour force on previous year.
Per cent. Labour force as a percentage of population
aged 16-74 (labour force participation rate) 1980-2003
75
4
Change in labour
force (right-hand
scale)
73
2
71
0
69
-2
Labour force
participation rate
(left-hand scale)
67
1980
1985
1990
-4
1995
2000
Sources: Statistics Norway and Norges Bank
Chart 4.1 Alternative assumptions for the money
market rate. Forward rates1) and assumption of a
sight deposit rate of 4 per cent2).
10
10
8
3-month money
market rate
8
6
6
Constant interest rate2)
4
2
4
Forward interest rate
19 June
0
2000 2001 2002 2003 2004 2005
1) 3-month
2
0
money market rates up to and including May 2003.
3-month forward rates are estimated using 4 money market rates and
5 government bond yields with different maturities as observed on 19
June.
2) The money market rate is normally about ¼ percentage point higher
than the sight deposit rate.
Source: Norges Bank
Chart 4.2 Alternative assumptions for the krone
exchange rate (I-44). Forward rate and stable exchange
rate equal to average 3/6-19/6 (I-44= 93.5). Index
110
110
Import-weighted exchange rate, I-44
100
100
Forward rate 19 June
Average 3/6-19/6
90
80
1999
90
80
2001
Source: Norges Bank
2003
2005
Chart 4.3 Estimated effect of historical exchange
rate movements on rise in prices for imported
consumer goods. Contribution in percentage points
to 4-quarter rise. 2001 Q1 - 2006 Q4
1.5
1.5
0.5
0.5
-0.5
-0.5
-1.5
-1.5
-2.5
-2.5
-3.5
-3.5
-4.5
2001 2002 2003 2004 2005 2006
-4.5
Source: Norges Bank
Chart 4.4 Consumer prices and producer prices
among trading partners. 1995-2005. Annual rise. Per
cent
6
6
5
5
4
4
3
Consumer prices
3
2
2
1
1
0
0
Producer prices
-1
-1
-2
-2
1995
1997
1999
2001
Sources: EcoWin and Norges Bank
2003
2005
Chart 4.5 Annual wage growth1) and unemployment
rate2). 1993-2003. Per cent
Annual wage growth
6
6
4
4
2
2
Unemployment rate
0
0
1993
1995
1997
1999
2001
2003
1) Average
2)
for all groups. Including costs of additional vacation days
Registered unemployed as a percentage of the labour force
Sources: TRCIS, Directorate of Labour and Norges Bank
Chart 4.6 Air fares. Adjusted for taxes. 12-month
rise. Jan 01 - May 03. Per cent
30
30
25
25
20
20
15
15
10
10
5
5
0
0
-5
-5
-10
Jan 01
-10
Jul 01
Jan 02
Jul 02
Jan 03
Sources: Statistics Norway and Norges Bank
Chart 4.7 Consumer prices for food and nonalcoholic beverages in Norway and Sweden. Not
adjusted for taxes. Index. Jan 1990 = 100
135
135
125
125
115
Norway
105
95
115
105
Sweden
85
1990 1992 1994 1996 1998 2000 2002
Sources: EcoWin, Statistics Sweden and Statistics
Norway
95
85
Chart 4.8 Expected consumer price inflation in 2
years
4
4
Employee
organisations
Employers' organisations
3
3
Experts
2
2
1
1
0
0
Jun 02
Sep 02
Source: TNS Gallup
Dec 02
Mar 03
Jun 03
Chart 4.9 Expected consumer price inflation in 5
years
4
4
Employee
organisations
3
2
3
Experts
2
Employers' organisations
1
1
0
0
Jun 02
Sep 02
Source: TNS Gallup
Dec 02
Mar 03
Jun 03
Chart 4.10 Consumer price inflation. Historical
developments and market participants' projections
for future consumer price inflation according to a
survey by Consensus Economics. Per cent
4
4
3
3
2
2
Inflation projection published in April 2003
1
0
1
0
2001
2004
2007
2010
Sources: Consensus Economics and Statistics Norway
Chart 4.11 Monetary policy assumptions. Sight
deposit rate of 4 per cent and import-weighted krone
exchange rate equal to the average for 3/6-19/61)
(I-44=93.5)
84
8
88
6
Money market rate
(right-hand scale)
92
4
Krone exchange rate (I-44)
(left-hand scale)
96
100
2
0
2002
1) A rising
2003
2004
2005
curve denotes an appreciation of the krone
Source: Norges Bank
Chart 4.12 Projections and uncertainty for CPI-ATE
with a sight deposit rate of 4 per cent and importweighted krone exchange rate equal to the average
for 3/6-19/6 (I-44= 93.5). 12-month growth. Per cent
5
5
30% 50% 70% 90%
4
4
3
3
2
2
1
1
0
2001
0
1) Adjusted
2002
2003
2004
2005
for tax changes and excl. energy products (CPI-ATE)
The bands in the fan indicate different probabilities for consumer
price inflation.
Sources: Statistics Norway and Norges Bank
Chart 4.13 Projected CPI-ATE and output gap1) with
a sight deposit rate of 4 per cent and importweighted krone exchange rate equal to the average
for 3/6-19/6 (I-44= 93.5). Per cent
3
3
2
CPI-ATE
1
2
1
Output gap
0
0
-1
-1
-2
-2
2002
2003
2004
2005
1) The
output gap is a measure of the difference between actual
and trend output. See box in IR 1/03
Sources: Statistics Norway and Norges Bank
Chart 4.14 Interest rate in line with forward interest
rate and gradual exchange rate depreciation of 3 per
cent1)
84
8
88
6
Money market rate
(right-hand scale)
92
Krone exchange
rate (I-44)
(left-hand scale)
96
4
2
100
0
2002
1)A rising
2003
2004
2005
curve denotes an appreciation of the krone
Source: Norges Bank
Chart 4.15 Projections and uncertainty for CPI-ATE
with forward interest rate and gradual exchange rate
depreciation of 3 per cent. 12-month rise. Per cent
5
5
30% 50% 70% 90%
4
4
3
3
2
2
1
1
0
2001
0
1) Adjusted
2002
2003
2004
2005
for tax changes and excl. energy products (CPI-ATE)
The bands in the fan indicate different probabilities for consumer
price inflation.
Sources: Statistics Norway and Norges Bank
Chart 4.16 Projected CPI-ATE and output gap1) with
forward interest rate and gradual exchange rate
depreciation of 3 per cent. Per cent
3
3
2
2
CPI-ATE
1
1
Output gap
0
0
-1
-1
-2
-2
2002
2003
2004
2005
1) The
output gap is a measure of the difference between actual
and trend output. See box in IR 1/03
Sources: Statistics Norway and Norges Bank
Chart 4.17 Projections for CPI-ATE based on
different interest rate and exchange rate
assumptions. 12-month rise. Per cent
4
3
2
Forward interest rate and
forward exchange rate
without impact on wage
growth
Forward interest
rate and forward
exchange rate
3
2
CPI-ATE
Interest rate of 4 per
cent and exchange
rate 3/6-19/6, I-44=
93.5
1
0
2001
4
1
0
2002
2003
2004
2005
Sources: Statistics Norway and Norges Bank
Chart 4.18 Phillips curve. 2-year average
Annual wage growth (incl. costs of
additional vacation days)
7
7
6
98-99
5
6
02-03
5
00-01
4
96-97
04-051)
3
4
3
94-95
2
2
1
1
0
0
0
2
4
6
8
Registered unemployed and persons on labour market
programmes as a percentage of the labour force
1) Estimates
based on a sight deposit rate of 4 per cent and a
constant krone exchange rate
Source: Norges Bank
Charts for boxes and
annexes
Low
consumer
price inflation
Chart 1 CPI-ATE, projections and uncertainty in
IR 2/02. 12-month rise. Per cent
5
5
30% 50% 70% 90%
4
4
3
3
2
2
1
0
2001
Average value April
and May 2003: 1.4
1
0
2002
2003
2004
Sources: Statistics Norway and Norges Bank
Chart 2 CPI-ATE
Total1) and by supplier sector2).
12-month rise. Per cent. Jan 99 - May 03.
6
Goods and services produced in Norway
4
2
CPI-ATE
0
4
2
0
Imported consumer goods
-2
-4
1999
-2
-4
2000
2001
2002
2003
Norges Bank's estimates up to and including July 2000,
thereafter figures published by Statistics Norway
1)
2)
6
Norges Bank's estimates
Sources: Statistics Norway and Norges Bank
Chart 3 Import-weighted exchange rate (I-44)1) and
interest rate differential against trading partners.
Daily figures.
80
4
3-month interest
rate differential
(left-hand scale)
3
90
2
I-44 (right-hand
scale)
1
0
2000
1) A rising
100
110
2001
2002
2003
curve denotes an appreciation of the krone
Source: Norges Bank
Chart 4 Isolated effect of historical exchange rate
movements on rise in prices for imported consumer
goods (blue line) and actual rise in prices for
imported consumer goods, historical (red) and
projections (green). Percentage points
1.5
1.5
0.5
0.5
-0.5
-0.5
-1.5
-1.5
-2.5
-2.5
-3.5
-3.5
-4.5
2001 2002 2003 2004 2005 2006
-4.5
Source: Norges Bank
Chart 5 CPI-ATE projections in IR 2/02 and IR 2/03.
Isolated effect of altered exchange rate.
3.5
3
3.5
Contribution to inflation from
exchange rate
2.5
3
IR 2/02
2
2
1.5
IR 2/03
1
0.5
Jul 01
2.5
1.5
1
0.5
Jul 02
Jul 03
Jul 04
Sources: Statistics Norway and Norges Bank
Chart 6 CPI-ATE projections in IR 2/02 and IR 2/03.
Isolated effect of lower wage projections.
3.5
3.5
3
Contribution of lower
wage estimates to
inflation
IR 2/02
2.5
2.5
2
2
1.5
IR 2/03
1
0.5
Jul 01
3
1.5
1
0.5
Jul 02
Jul 03
Jul 04
Sources: Statistics Norway and Norges Bank
Chart 7 CPI-ATE projections in IR 2/02 and IR 2/03.
Combined effect of actual exchange rate and lower
wage projections (sum of Charts 5 and 6)
3.5
3.5
Shift: new
exchange rate
and lower wages*)
3
IR 2/02
2.5
2.5
2
2
1.5
1.5
IR 2/03
1
0.5
Jul 01
3
1
0.5
Jul 02
Jul 03
Jul 04
*) The green line shows how the projection from IR 2/02 would be
changed by incorporating the exchange rate path and wage
developments as they are incorporated today.
Sources: Statistics Norway and Norges Bank
Evaluation of inflation
reports in inflationtargeting countries
UK
New Zeal.
Brazil
Thailand
Chile
Czech Rep.
Iceland
Norway
Sweden
Philippines
Israel
Canada
Mexico
Hungary
Switzerland
Poland
South Africa
Australia
Peru
Korea
Chart 1 Overall evaluation (1 = poor, 10 = good)
10
9
8
10
9
8
7
6
5
4
3
7
6
5
4
3
2
1
0
2
1
0
Source: "How Do Central Banks Write?"
Why does household
debt growth remain
high?
Chart 1 Actual and estimated household gross debt.
Percentage change over 4 quarters
12
10
12
10
Estimated debt growth
8
8
6
6
4
Actual debt growth
4
2
2
0
0
-2
1994
-2
1996
Source: Norges Bank
1998
2000
2002
Chart 2 Projection of household gross debt.
Percentage change from previous year.
12
12
10
10
8
8
6
6
4
4
2
2
0
0
2002
2003
Source: Norges Bank
2004
2005
Levels of real capital in
enterprises still too
high?
Chart 1 US GDP and investment.
Growth on same quarter previous year. Two years before and two years after the trough of the economic
cycle.
Investments excluding housing
20
20
Previous recessions1)
10
0
8
6
10
Current recession
-20
-1 yr
1) Non-weighted
Trough
+1 yr
+2 yr
average over the last 5 recessions
Sources: EcoWin, NBER and Norges Bank
Previous recessions1)
Current
recession
0
-2
-2 yr
6
4
2
-10
-20
8
4
0
-10
-2 yr
GDP
2
0
-2
-1 yr
Trough
+1 yr
+2 yr
Chart 2 Private investment in the US, excluding
housing. As a percentage of GDP. Volume
20
15
10
1982
20
Historical average
1982-2002
15
10
1986
1990
1994
1998
Sources: EcoWin, NBER and Norges Bank
2002
Strategy Document 1/03
Chart 1 Real interest rate. 1966-2002
10
10
8
8
6
6
4
4
Average
2
2
0
0
-2
-2
-4
-4
65
70
75
Source: Norges Bank
80
85
90
95
00
Chart 2 Real exchange rate. 1970-2002.
20
20
15
15
10
10
5
5
Average
0
0
-5
-5
-10
-10
70
75
80
Source: Norges Bank
85
90
95
00
Chart 3a Alternative 1: The krone exchange rate
remains strong.
84
8
88
6
Money market rate
(right-hand scale)
92
4
96
2
100
2002
Krone exchange rate (I-44)
(left-hand scale)
0
2003
Source: Norges Bank
2004
2005
Chart 3b Alternative 1: The krone exchange rate
remains strong.
3
3
2
CPI-ATE
1
2
1
Output gap
0
0
-1
-1
2002
2003
Source: Norges Bank
2004
2005
Chart 4a Alternative 2: The krone exchange rate
weakens. Forward interest rate and forward
exchange rate
84
8
88
Money market rate
(right-hand scale)
6
92
4
96
2
100
2002
Krone exchange rate (I-44)
(left-hand scale)
0
2003
Source: Norges Bank
2004
2005
Chart 4b Alternative 2: The krone exchange rate
weakens. Forward interest rate and forward
exchange rate
3
3
CPI-ATE
2
2
1
1
Output gap
0
0
2002
2003
Source: Norges Bank
2004
2005
Annexes 4 and 5
3-month money market rate and sight deposit rate. Monthly
figures. Jan 1995 - May 2003
10
10
8
8
3-month money market rate
6
6
Sight deposit rate
4
4
2
2
0
1995
0
1996
1997
Source: Norges Bank
1998
1999
2000
2001
2002
2003
3-month rates in the US, the euro area and Japan. Per cent.
Monthly figures, Jan 1995 - May 2003
7
7
6
6
5
5
4
Euro area1)
4
3
3
US
2
2
1
1
0
1995
Japan
1996
1) Theoretical
1997
1998
1999
ECU rate up to December 1998
Source: Norges Bank
2000
2001
2002
2003
0
115
Trade-weighted exchange rate index and import-weighted exchange rate
I-44. Monthly figures, Jan 1995-May 2003
115
Trade-weighted exchange rate
index, TWI (1990=100)
110
110
105
105
100
100
Import-weighted exchange rate, I-44
(1995=100)
95
95
90
90
85
1995
85
1996
1997
Source: Norges Bank
1998
1999
2000
2001
2002
2003
The credit indicator (C2), credit to households and total credit to the
non-financial private sector and municipalities, mainland Norway (C3).
12-month rise. Per cent. Monthly figures, Jan 1995 - Apr 03. 2003.
15
15
Credit to households
10
C2
C3 mainland Norway
5
0
1997
10
5
0
1998
Source: Norges Bank
1999
2000
2001
2002
2003
Alternative assumptions for the krone exchange rate
(I-44). Forward rate and stable exchange rate equal
to average 3/6-19/6 (I-44= 93.5). Index
110
110
Import-weighted exchange
rate, I-44
100
100
Forward rate 19 June
Average 3/6-19/6
90
80
1999
90
80
2001
Source: Norges Bank
2003
2005
Alternative assumptions for money market rate.
Forward rates1) and assumption of a sight deposit
rate of 4 per cent2)
10
10
8
3-month money
market rate
8
6
6
Constant interest rate2)
4
2
4
Forward interest rate
19 June
0
2000 2001 2002 2003 2004 2005
2
0
3-month money market rates up to and including May 2003.
3-month forward rates are estimated using 4 money market rates
and 5 government bond yields with different maturities as observed
on 19 June.
2) The money market rate is normally ¼ percentage point higher
than the sight deposit rate.
1)
Source: Norges Bank