Download - Executive Board meeting 3 November 2004
Norges Bank
1
Executive Board meeting3 November 2004
Norges Bank
2
Economic developments
Norges Bank
3
Industrial output in the US, Japan and the euro areaThree-month moving average. Seasonally adjusted. Volume
-5
-4
-3
-2
-1
0
1
2
3
4
5
1997 1998 1999 2000 2001 2002 2003 2004
-5
-4
-3
-2
-1
0
1
2
3
4
5
Sources: EcoWin/Federal Reserve Board, Ministry of Economy,Trade and Industry and EUR-OP/EUROSTAT
US
Japan
Euro area
Norges Bank
4
Employment in the US, Japan, Germany, the UK and Sweden. 12-month rise
-2
-1
0
1
2
3
4
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
-2
-1
0
1
2
3
4
Source: EcoWin/National statistics
US Sweden
Germany
Japan
UK
Norges Bank
5Source: EcoWin / National Bureau of Statistics China
China - GDPSo far this year. Percentage change on same month previous year
0
3
6
9
12
15
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
0
3
6
9
12
15
Norges Bank
6
Prices for some important commodities, measured in USD. Index. 2.1.2003 = 100. Daily figures
60
100
140
180
220
260
Jan 03 May 03 Sep 03 Jan 04 May 04 Sep 04
60
100
140
180
220
260
Sources: Norges Bank and Ecowin/ London Metal Exchange, The Economist
Copper
Aluminium
Oil
NickelLead
Zinc
The Economist's commodity price index
Norges Bank
7
Interest rate expectations Actual developments and expected key rate1) at 24 June and 28 October 2004. 2 January 2003 – 1 August 2006
0
1
2
3
4
5
6
2003 2004 2005 2006
0
1
2
3
4
5
6
UK
Euro area
US
24 June28 October
1) FRA and futures contracts adjusted for the estimated difference between 3-month money market rates and the key rate.
Sources: Bloomberg, Reuters and Norges Bank
Norges Bank
8
Forward interest rates29 October 2004. Implied short-term forward rates
0
1
2
3
4
5
6
2004 2006 2008 2010 2012 2014
0
1
2
3
4
5
6
Norway Euro area UK US
Source: Norges Bank
Norges Bank
9
Oil price Brent Blend USD per barrel. Daily figures
0
10
20
30
40
50
60
2002 2003 2004 2005 2006 2007
0
10
20
30
40
50
60
Sources: Norges Bank, Telerate and IPE
Futures prices 24 June (IR 2/04)
28 October
10 September
Norges Bank
10
Spread Brent-Dubai and WTI-Brent14-day moving average. USD per barrel
-2
0
2
4
6
8
10
12
14
2001 2002 2003 2004
-2
0
2
4
6
8
10
12
14
Sources: EcoWin AB
Spread Brent and Dubai
Spread WTI and Brent
Norges Bank
11
Oil futures pricesUSD per barrel light crude. Daily figures
10
20
30
40
50
60
2001 2002 2003 2004
10
20
30
40
50
60
Sources: Norges Bank and EcoWin/NYMEX
Delivery in 6-7 years
Delivery in 1 month
Norges Bank
12
OPEC 10 spare capacityMillion barrels per day
0
1
2
3
4
5
6
7
8
2000 2001 2002 2003 2004
0
1
2
3
4
5
6
7
8
Sources: EIA (annual figures) and IEA (monthly figures)
Monthly figures
Annual figures
Norges Bank
13
CPI-ATETotal and broken down into imported and domestically produced
goods and services1). Historical price inflation and projections IR 2/04 (broken line).12-month rise. Per cent
-5
-4
-3
-2
-1
0
1
2
3
Jul 03 Oct 03 Jan 04 Apr 04 Jul 04 Oct 04
-5
-4
-3
-2
-1
0
1
2
3
Sources: Statistics Norway and Norges Bank
Goods and services produced in Norway (0.7)
1) Norges Bank's estimates
Imported consumer goods (0.3)
CPI-ATE
Norges Bank
14
85
90
95
100
105
Jan 02 Jun 02 Nov 02 Apr 03 Sep 03 Feb 04 Jul 04
85
90
95
100
1051)A rising curve denotes a stronger krone exchange rate
Source: Norges Bank
Developments in the krone exchange rate1) (I-44)Daily figures. 1 January 2002 – 1 November 2004
Norges Bank
15
House pricesNEF/ECON (Januar 1998–October 2004) and SN (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
Sources: Statistics Norway (SN), Norw. Association of Real Estate Agents (NEF), Association of Real Estate Agency Firms
SN
NEF
Norges Bank
16
Building starts - dwellings and other buildings1000 m2 per month. Trend. January 2000 - August 2004
100
150
200
250
300
350
400
2000 2001 2002 2003 2004
100
150
200
250
300
350
400
Housing starts
Other building starts
Source: Statistics Norway
Norges Bank
17
Price index for office and commercial propertyIndex 2000 = 100. 1st half of 1996 – 1st half of 2004
60
70
80
90
100
110
120
130
1996 1997 1998 1999 2000 2001 2002 2003 2004
60
70
80
90
100
110
120
130
Source: Statistics Norway
Norges Bank
18
Credit from domestic sources to households and non-financial enterprises (C2). Percentage growth on same month previous year. August 2001 – September 2004
-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
C2 total
C2 households
Norges Bank
19
0
3
6
9
12
15
0
3
6
9
12
15
Local government revenues, underlying spending growth over the central government budget and mainland GDP Percentage change in value from 2003 to 2005
Source: National Budget 2005
Local governmentRevenues Spending
Central governmentGDP
Mainland Norway
Norges Bank
20
Developments in employment and output
four quarters after the start of a cyclical upturn1). Mainland Norway. Per cent
0
1
2
3
4
0
1
2
3
4
1) We have assumed that the previous cyclical upturns began in 1982 Q4 and 1991 Q4. The current cyclical upturn started in 2003 Q2.
Mainland GDP
Previous
Now
PreviousNow
Number employed
Sources: Statistics Norway and Norges Bank
Norges Bank
21
0
1
2
3
4
5
6
7
8
2001 2003 2005 200780
85
90
95
100
105
110
2001 2003 2005 2007
3-month money market rate
Forward interest rate 28 Oct (IR 3/04)
Source: Norges Bank
Import-weighted exchange rate, I-44
Forward exchange rate 28 Oct (IR
3/04)
1) A rising curve denotes a weaker krone exchange rate
Assumptions for money market rates and the krone exchange rate I-441)
(forward interest rate and forward exchange rate)
Forward interest rate 24 June (IR 2/04)
Forward exchange rate 24 June
(IR 2/04)
Norges Bank
22
Projections and uncertainty for CPI-ATE1)
12-month rise. Per cent. January 2001– December 2007
0
1
2
3
4
5
2001 2002 2003 2004 2005 2006 2007
0
1
2
3
4
530% 50% 70% 90%
1) The bands in the fan indicate different probabilities for developments in the CPI-ATE.
Sources: Statistics Norway and Norges Bank
Norges Bank
23
Projections for the CPI-ATE1) and the output gap2)
Inflation Report 2/04 (blue) and 3/04 (red). Per cent
-2
-1
0
1
2
3
-2
-1
0
1
2
3
2002 2003 2004 2005 2006 2007
1) CPI-ATE: CPI adjusted for tax changes and excluding energy products2) The output gap measures the difference between actual and trend mainland GDP
CPI-ATE
Output gap
IR 2/04IR 3/04
Sources: Statistics Norway and Norges Bank
Norges Bank
24
Projections for main macroeconomic aggregates IR 3/04
Source: Norges Bank
2004 2005 2006 2007
Mainland demand 4¼ 4 3½ 2¼
Private consumption 5 4½ 3¾ 2½
Public consumption 2 1¾ 1½ 1½
Gross investment 5¾ 5 5 2¾
Petroleum investment 12½ 15 5 -7½
Traditional exports 4 4½ 3 3
Imports 8½ 6 4 1¾
Mainland GDP 3¾ 3½ 2¾ 2
Employment ¼ 1¼ 1 ¼ ½
LFS unemployment (rate) 4½ 4 3¾ 3¾
CPI-ATE ¼ 1½ 1¾ 2¼
Annual wage growth 3¾ 4½ 4¾ 4¾
Output gap mainland Norway - ¼ ¾ 1 ½