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Executive Board Meeting 30 June 2005

This report provides analysis, projections, and trends of key economic indicators such as GDP growth, CPI, interest rates, oil prices, employment, and investment intentions.

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Executive Board Meeting 30 June 2005

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  1. Executive Board Meeting30 June 2005

  2. Estimated GDP growth in 2005 among Norway's trading partners.Per cent Source: Norges Bank

  3. CPI/HICP (core)in the US,the euro area, Japan and China1)Percentage change on same month previous year China US Euro area Japan 1) CPI Source: EcoWin / National statistics

  4. Consumer prices in the Nordic countriesPercentage rise on same month previous year Sweden (UND1X) Denmark* Finland* Norway (CPI-ATE) * CPI excl. energy, food, alcohol and tobacco Source: EcoWin / National statistics

  5. Indicator of external price impulses to imported consumer goods measured in foreign currencyAnnual figures. Per cent. 1995 – 20081) 1) Projections for 2005 -2008 Source: Norges Bank

  6. Developments in 10-year government bond yields Norway US Germany Source: EcoWin

  7. 28 June 24 May Interest rate expectations for the US, the euro area and Sweden Sweden Euro area US Sources: Reuters and Norges Bank

  8. Oil price Brent Blend and futures pricesDaily figures, USD per barrel. January 2002 - June 2005 24 June (IR 2/04) 28 June 24 May 10 March (IR 1/05) Sources: Telerate, IPE and Norges Bank

  9. Oil futures pricesUSD per barrel light crude. Daily figures. January 2001 – June 2005 Delivery in 1 month Delivery in 6-7 years Source: EcoWin/ NYMEX

  10. CPI-ATE. Total and distributed by imported and domestically produced goods and servicesHistorical and projections IR 1/05 (broken lines). 12-month change. Per cent Goods and services produced in Norway (0.7) CPI-ATE Imported consumer goods (0.3) Sources: Statistics Norway and Norges Bank

  11. 3-month interest rate differential and import-weighted exchange rate (I-44)A fall in value denotes a depreciating currency. Daily figures I-44 (right-hand scale) Weighted 3-month interest rate differential (left-hand scale) 24 May 05 28 June 05 Sources: Norges Bank and Bloomberg

  12. I-44, interest rate differential (3-month) and expected interest rate differential (12-month) 1 year ahead Expected 1-year interest rate differential 1 year ahead (euro, USD, SEK, GBP) 3-month interest rate differential against trading partners (9 currencies) (right-hand scale) I-441) (left-hand scale) 1) A rising curve denotes an appreciating currency Sources: Norges Bank and EcoWin

  13. 3-month money market rate and I-441) in scenario with stronger exchange rate (IR 1/05)Quarterly figures. 2001 Q1 – 2008 Q4 Interest rate in scenario with stronger exchange rate (left-hand scale) Interest rate in baseline scenario (left-hand scale) I-44 in scenario with stronger exchange rate (right-hand scale) I-44 29 June 2005 1)The figure for 2005 Q2 are based on the average through 29 June Source: Norges Bank

  14. Interest rate expectations Norway 24 May 28 June Sources: Norges Bank and Reuters

  15. Summary from regional networkRound 3 2005 • Demand is growing in all sectors at approximately the same pace as in the last round.The same growth rate is expected in the period ahead.Lowered expectations in the export and building and construction industries • Approximately 40% of our contacts have some or considerable problems in meeting growth in demand.Building and construction and parts of petroleum-related industry have reached capacity • Plans for a moderate increase in investment, as in previous round. • Expect moderate growth in employment in all industries apart from the public sector • In the future more people expect higher inflation than expect lower inflation, but the number expecting higher inflation is lower than earlier in 2005. • Profitability is still increasing throughout the private sector, primarily among suppliers to the petroleum industry.

  16. Employment and man-hours worked Seasonally adjusted. Index 1996 Q1=100. Quarterly figures 1996 Q1 – 2005 Q1 Number employed Man-hours Sources: Statistics Norway and Norges Bank

  17. Unemployed. LFS unemployment, registered unemployed and persons on labour market programmesIn thousands. Seasonally adjusted. Monthly figures, Jan 2001 – May 2005 Registered unemployed and on labour market programmes LFS unemployment Registered unemployed Sources: Statistics Norway and the Directorate of Labour

  18. Investment intentions survey. Oil and gas recovery incl. pipeline transport.Estimated and actual investment. In billions of NOK 2005 2004 2006 2003 2002 Final figures Estimate published previous year Estimate published same year Source: Statistics Norway

  19. House prices from the real estate businessAnnualised 3-month centred moving change. Seasonally adjusted figures. Per cent Sources: Associations of Norwegian real estate agents (NEF, EFF) and Norges Bank

  20. Developments in banks' interest marginsPer cent Interest margin, total Deposit margin Lending margin Source: Norges Bank

  21. 3-month money-market rate and import-weighted exchange rate (I-44)1) 2) in the baseline scenario.Quarterly figures. 2004 Q1 – 2008 Q4 IR 1/05 Import-weight krone exchange rate I-44 (right-hand scale) IR 2/05 IR 1/05 IR 2/05 Interest rate (left-hand scale) 1)A rising curve denotes a weaker krone exchange rate.Reflects the forward rate on 24 June 2)The figures for 2005 Q2 are based on the average through 24 June Source: Norges Bank

  22. Projections for the CPI-ATE and output gap in the baseline scenario.Quarterly figures. Per cent. 04 Q1 – 08 Q4 CPI-ATE Output gap Sources: Statistics Norway and Norges Bank

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