norges bank 1 executive board meeting 24 january 2007
TRANSCRIPT
Norges Bank
1
Executive Board meeting24 January 2007
Norges Bank
2
Growth forecasts Consensus ForecastsGDP. Percentage change from previous year
0
2
4
6
8
10
12
US Japan Euroarea
Sweden China
December
January
0
2
4
6
8
10
12
US Japan Euroarea
Sweden China
December
January
2006 2007
Source: Consensus Forecasts
Norges Bank
3
House prices1) and housing starts in the US Seasonally adjusted. 12-month change.2) January 2003 – December 2006
-30
-20
-10
0
10
20
2003 2004 2005 2006 2007
-30
-20
-10
0
10
20
1) Median price for dwellings2) 3-month moving average
Existing dwellingsNew dwellings
Housing starts
Sources: Reuters EcoWin and Norges Bank
Norges Bank
4
0
100
200
300
400
500
600
700
2002 2003 2004 2005 2006 2007
Oil prices, futures prices and commodity prices 1 January 2002 – 22 January 2007
10
20
30
40
50
60
70
80
90
2002 2004 2006 2008
22 January 2007
Sources: Telerate, IPE, Reuters EcoWin and Norges Bank
26 October IR 3/06
Copper
Nickel
Aluminium
Zinc
Oil price Brent Blend and futures pricesUSD per barrel
Commodity prices In USD. Indices, 1 January 2002 = 100
Norges Bank
5
CPI/HICP core 12-month change. Per cent. January 1997 – December 2006
-2
-1
0
1
2
3
4
1997 1999 2001 2003 2005 2007
-2
-1
0
1
2
3
4
Sources: Reuters EcoWin, Eurostat and national statistical offices
UK1)
US2)
Euro area1)
Japan2)
1) HICP excl. energy, food, alcohol and tobacco 2) CPI excl. food and energy
Sweden1)
Norges Bank
6
80
90
100
110
120
130
140
Jan 06 Mar 06 May 06 Jul 06 Sep 06 Nov 06 Jan 07
80
90
100
110
120
130
140
Equities Indices,1 January 2006 = 100. 1 January 2006 – 22 January 2007
Euro area
US
Japan
Norway
Sources: STOXX, S&P500, Nikkei, Oslo Stock Exchange and Reuters EcoWin
Emerging markets
Norges Bank
7
10-year yield in different countries Per cent. 1 January 2006 – 22 January 2007
3.0
3.5
4.0
4.5
5.0
5.5
Jan 06 Mar 06 May 06 Jul 06 Sep 06 Nov 06 Jan 07
3.0
3.5
4.0
4.5
5.0
5.5
Norway
US
Germany
Sweden
UK
Sources: Reuters and Bloomberg
Norges Bank
8
2
4
6
8
10
2002 2003 2004 2005 2006 2007
2
4
6
8
10
Expected 5-year yield five years aheadPer cent. 2 January 2002 – 22 January 2007
Source: Norges Bank
Norges Bank
9Sources: Reuters and Norges Bank
0
1
2
3
4
5
6
Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09
0
1
2
3
4
5
6
US
Euro area22 January 2007
IR 3/06 (31 October)
Sweden
UK
Key rates and forward rates IR 3/06 and 22 January 2007
Norges Bank
10
-1
0
1
2
3
4
5
2002 2003 2004 2005 2006 2007 2008 2009
85
88
91
94
97
100
103
Sources: Bloomberg and Norges Bank
I-44 (right-hand scale)
Weighted interest ratedifferential (left-hand scale)
31 October 2006(IR 3/06)
22 January 2007
1) A rising curve denotes an appreciation of the krone.
3-month interest rate differential and import-weighted exchange rate (I-44)1)
January 2002 – December 2009
Average 1 – 22 January 2007
Norges Bank
11
CPI and uncertainty interval for underlying inflation1)
12-month change. Per cent. January 2002 – December 2006
-2
0
2
4
6
2002 2003 2004 2005 2006
-2
0
2
4
6
Highest indicator
Lowest indicator
Sources: Statistics Norway and Norges Bank
CPI
1) Highest and lowest indicators of the CPI-ATE, the weighted median and the 20% trimmed mean
Norges Bank
12
-5
-4
-3
-2
-1
0
1
2
3
4
2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007
-5
-4
-3
-2
-1
0
1
2
3
4
CPI-ATE1)
Total and by supplier sector2). 12-month change. Per cent. January 2002 – December 2006
Sources: Statistics Norway and Norges Bank
Domestically produced goods and services (0.7)
Imported consumer goods (0.3)
CPI-ATE
1) CPI-ATE adjusted for the estimated effect of reduced maximum day-care rates from January 2006.2) Norges Bank's estimates.
Norges Bank
13
UnemploymentLFS unemployment and registered unemployed. Seasonally adjusted.
Per cent. February 1983 - December 2006
0
2
4
6
8
1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
0
2
4
6
8
Sources: Statistics Norway and Norwegian Labour and Welfare Organisation (NAV)
LFS unemployment
Registered unemployed
Norges Bank
14
2220
2250
2280
2310
2340
2370
2400
2430
1999 2000 2001 2002 2003 2004 2005 2006
2220
2250
2280
2310
2340
2370
2400
2430
Source: Statistics Norway
Employment (LFS)1)
In 1000s. Seasonally adjusted. January 2005 – October 2006
1) The changes to the LFS resulted in a break in the time series between 2005 and 2006.
Norges Bank
15
Manufacturing output index Volume. Index. 3-month moving average.
January 2001 – November 2006
90
95
100
105
110
115
120
2001 2002 2003 2004 2005 2006
90
95
100
105
110
115
120
Consumer goodsIntermediate goods
Capital goods
Source: Statistics Norway
Norges Bank
16
-5
5
15
25
35
2002 2003 2004 2005 2006
-5
5
15
25
35
Enterprise sector credit1) and liquid assets2) 12-month growth. Per cent. January 2002 – November 2006 (C3 to October)
1) Mainland non-financial enterprises (C3).2) Non-financial enterprises' liquid assets (M2).
Money supply (M2)
Source: Statistics Norway
Total credit (C3)
Norges Bank
17
Index of commodity consumption Volume. Seasonally adjusted. Index, 1995 = 100.
January 2004 – November 2006
130
135
140
145
150
155
Jan 04 Jun 04 Nov 04 Apr 05 Sep 05 Feb 06 Jul 06 Dec 06
130
135
140
145
150
155
Sources: Statistics Norway and Norges Bank
Norges Bank
18
House prices and household debt12-month change. Per cent. January 2001 – December 2006
(C2 to November)
-5
0
5
10
15
20
25
2001 2002 2003 2004 2005 2006 2007
6
8
10
12
14
2001 2002 2003 2004 2005 2006
House prices Household debt (C2)
Sources: Norwegian Assoc. of Real Estate Agents, Assoc. of Real Estate Agency Firms, Finn.no, ECON and Norges Bank
Norges Bank
19
Construction cost index for residential buildings12-month rise. Per cent. January 2001 – December 2006
0
1
2
3
4
5
6
7
2001 2002 2003 2004 2005 2006
0
1
2
3
4
5
6
7
Source: Statistics Norway
Norges Bank
20
3
3.5
4
4.5
5
5.5
6
07 Q1 07 Q3 08 Q1 08 Q3 09 Q1 09 Q3
3
3.5
4
4.5
5
5.5
6
Sight deposit rate in baseline scenario and estimated forward rates1)
Per cent. At 22 January 2007
Market 22 January 2007
Market before IR 3/06 (31 October)
Baseline scenario IR 3/06
Sources: Reuters and Norges Bank
1) In the calculation, a credit risk premium and a technical difference of 0.20 percentage point have been deducted to make the forward rates comparable with the sight deposit rate.
Norges Bank
21
Monetary Policy Strategy - Inflation Report 3/06
• The Executive Board’s assessment is that the sight deposit rate
should be in the interval 3¼ - 4¼ per cent in the period to the
publication of the next Inflation Report on 15 March 2007,
conditional on economic developments that are broadly in line
with the projections.
• The interest rate may gradually be raised to a more normal level
at a somewhat faster pace than envisaged earlier, although it is
unlikely that rates will be raised at every monetary policy
meeting. In the light of our current assessment, the interest rate
will thus continue to be raised in small, not too frequent steps.
Norges Bank
22
-2
-1
0
1
2
3
2004 2005 2006 2007 2008 2009
-2
-1
0
1
2
3
Baseline scenario in Inflation Report 3/06
0
1
2
3
4
5
6
7
8
9
2004 2005 2006 2007 2008 2009
0
1
2
3
4
5
6
7
8
9
70
80
90
100
110
2004 2005 2006 2007 2008 2009
70
80
90
100
110
0
1
2
3
4
2004 2005 2006 2007 2008 2009
0
1
2
3
4
Import-weighted exchange rate
CPI-ATE Output gap
Sight deposit rate
Sources: Statistics Norway and Norges Bank
Norges Bank
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Executive Board meeting24 January 2007