norges bank 1 executive board meeting 30 june 2005
TRANSCRIPT
Norges Bank
1
Executive Board Meeting30 June 2005
Norges Bank
2
Estimated GDP growth in 2005 among Norway's trading partners. Per cent
0
1
2
3
4
US Japan Euro area Sweden HP 25
IR 1/05
IR 2/05
Source: Norges Bank
Norges Bank
3
CPI/HICP (core) in the US, the euro area, Japan and China1)
Percentage change on same month previous year
-2
0
2
4
6
2000 2001 2002 2003 2004 2005
-2
0
2
4
6
Source: EcoWin / National statistics
USEuro area
Japan1) CPI
China
Norges Bank
4
Consumer prices in the Nordic countriesPercentage rise on same month previous year
-1
0
1
2
3
4
5
2002 2003 2004 2005
-1
0
1
2
3
4
5
Source: EcoWin / National statistics
Norway(CPI-ATE)
Sweden(UND1X)
Denmark*
* CPI excl. energy, food, alcohol and tobacco
Finland*
Norges Bank
5
Indicator of external price impulses to imported consumer goods measured in foreign currency
Annual figures. Per cent. 1995 – 20081)
-3
-2
-1
0
1
2
-3
-2
-1
0
1
2
1995 1998 2001 2004 2007
1) Projections for 2005 -2008
Source: Norges Bank
Norges Bank
6
Developments in 10-year government bond yields
2
3
4
5
6
Jan 04 May 04 Sep 04 Jan 05 May 05
2
3
4
5
6
Source: EcoWin
NorwayUS
Germany
Norges Bank
7
Interest rate expectations for the US, the euro area and Sweden
0
0.5
1
1.5
2
2.5
3
3.5
4
Jun 03 Dec 03 Jun 04 Dec 04 Jun 05 Dec 05 Jun 06 Dec 06
0
0.5
1
1.5
2
2.5
3
3.5
4
Sources: Reuters and Norges Bank
US
Euro area
28 June
24 May
Sweden
Norges Bank
8
15
20
25
30
35
40
45
50
55
60
65
2002 2003 2004 2005 2006 2007 2008
15
20
25
30
35
40
45
50
55
60
65
Oil price Brent Blend and futures prices Daily figures, USD per barrel. January 2002 - June 2005
10 March (IR 1/05)
Sources: Telerate, IPE and Norges Bank
28 June
24 June (IR 2/04)
24 May
Norges Bank
9
Oil futures pricesUSD per barrel light crude. Daily figures. January 2001 – June 2005
15
20
25
30
35
40
45
50
55
60
65
2001 2002 2003 2004 200515
20
25
30
35
40
45
50
55
60
65
Delivery in 6-7 years
Delivery in 1 month
Source: EcoWin/ NYMEX
Norges Bank
10
-5
-4
-3
-2
-1
0
1
2
3
4
Jul 03 Oct 03 Jan 04 Apr 04 Jul 04 Oct 04 Jan 05 Apr 05
-5
-4
-3
-2
-1
0
1
2
3
4
CPI-ATE. Total and distributed by imported and domestically produced goods and services
Historical and projections IR 1/05 (broken lines). 12-month change. Per cent
Sources: Statistics Norway and Norges Bank
Goods and services produced in Norway (0.7)
Imported consumer goods (0.3)
CPI-ATE
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
-1
0
1
2
3
4
5
2002 2003 2004 2005 2006
85
88
91
94
97
100
103
Sources: Norges Bank and Bloomberg
I-44 (right-hand scale)
Weighted 3-month interest rate differential
(left-hand scale)
24 May 05
28 June 05
Norges Bank
12Sources: Norges Bank and EcoWin
I-44, interest rate differential (3-month) and expected interest rate differential (12-month) 1 year ahead
90
92
94
96
98
100
Jan 04 Apr 04 Jul 04 Oct 04 Jan 05 Apr 05
-0.9
-0.6
-0.3
0.0
0.3
0.6
I-441) (left-hand scale)
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)
1) A rising curve denotes an appreciating currency
Norges Bank
13
3-month money market rate and I-441) in scenario with stronger exchange rate (IR 1/05)
Quarterly figures. 2001 Q1 – 2008 Q4
0
1
2
3
4
5
6
2004 2005 2006 2007 2008
88
90
92
94
96
98
100
I-44 in scenario with stronger exchange rate
(right-hand scale)
Interest rate in baseline scenario (left-hand scale)
Interest rate in scenario with stronger exchange rate (left-hand scale)
I-44 29 June 2005
1) The figure for 2005 Q2 are based on the average through 29 June
Source: Norges Bank
Norges Bank
14
Interest rate expectations Norway
0
1
2
3
4
5
6
Jun 03 Dec 03 Jun 04 Dec 04 Jun 05 Dec 05 Jun 06
0
1
2
3
4
5
6
Sources: Norges Bank and Reuters
24 May
28 June
Norges Bank
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.
Norges Bank
16
Employment and man-hours worked Seasonally adjusted. Index 1996 Q1=100. Quarterly figures
1996 Q1 – 2005 Q1
98
100
102
104
106
108
110
1996 1998 2000 2002 2004
98
100
102
104
106
108
110
Sources: Statistics Norway and Norges Bank
Number employed
Man-hours
Norges Bank
17
Unemployed. LFS unemployment, registered unemployed and persons on labour market programmes
In thousands. Seasonally adjusted. Monthly figures, Jan 2001 – May 2005
50
75
100
125
2000 2001 2002 2003 2004 2005
50
75
100
125
Sources: Statistics Norway and the Directorate of Labour
Registered unemployed and on labour market programmes
LFS unemployment
Registered unemployed
Norges Bank
18
Investment intentions survey. Oil and gas recovery incl. pipeline transport.
Estimated and actual investment. In billions of NOK
0
20
40
60
80
May Aug Nov Feb May Aug Nov Actual
0
20
40
60
80
2002
2003
2005
2004
Estimate published previous year Estimate published same year
Source: Statistics Norway
Final figures
2006
Norges Bank
19
House prices from the real estate businessAnnualised 3-month centred moving change. Seasonally adjusted
figures. Per cent
-10
-5
0
5
10
15
20
25
Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05
-10
-5
0
5
10
15
20
25
Sources: Associations of Norwegian real estate agents (NEF, EFF) and Norges Bank
Norges Bank
20
Developments in banks' interest marginsPer cent
-1
0
1
2
3
4
5
1998 1999 2000 2001 2002 2003 2004 2005
-1
0
1
2
3
4
5
Source: Norges Bank
Interest margin, total
Lending margin
Deposit margin
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
0
1
2
3
4
5
6
2004 2005 2006 2007 2008
88
90
92
94
96
98
100
IR 2/05Import-weight krone exchange rate I-44 (right-hand scale)
1)A rising curve denotes a weaker krone exchange rate. Reflects the forward rate on 24 June2) The figures for 2005 Q2 are based on the average through 24 June
Source: Norges Bank
Interest rate (left-hand scale)
IR 2/05
IR 1/05
IR 1/05
Norges Bank
22
Projections for the CPI-ATE and output gap in the baseline scenario. Quarterly figures. Per cent. 04 Q1 – 08 Q4
-2
-1
0
1
2
3
2004 2005 2006 2007 2008
-2
-1
0
1
2
3
Sources: Statistics Norway and Norges Bank
CPI-ATE
Output gap