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25.09.2009
1
Outlook for the Norwegian economy
Governor Svein Gjedrem, Norges Bank, 25 September 2009
Indicator for world trade12-month change. Per cent. January 2000 – July 2009
30
40
30
40 55
Manufacturing production Growth in past 3 months. Per cent.January 2000 – July 2009
-20
-10
0
10
20
30
-20
-10
0
10
20
30
-5
-2.5
0
2.5
-5
-2.5
0
2.5
US
Euro area
Norway
-50
-40
-30
-50
-40
-30
2000 2002 2004 2006 2008
-10
-7.5
-10
-7.5
2000 2002 2004 2006 2008
Norway
2
Sources: Thomson Reuters and Norges Bank
25.09.2009
2
Credit default risk for selected banksMeasured by CDS spreads. Basis points1 January 2007 – 21 September 2009
700700Citigroup
44Norway
Money market premiums1)
5-day moving averagePercentage points4 January 2007 – 18 September 2009
200
300
400
500
600
200
300
400
500
600 JP Morgan
2
3
2
3
US
Euro area
0
100
200
0
100
200
2007 2008 2009
3
Sources: Bloomberg, Thomson Reuters and Norges Bank
0
1
0
1
2007 2008 20091) Expected key rates are derived from Overnight Indexed Swap (OIS) rates
International equity markets1 January 2007 – 21 September 2009
Equity pricesIndex. 1 January 2007 = 100
120120
Implied volatilityStandard deviation in basis points 5-day moving average
100100
40
60
80
100
40
60
80
100
Euro area40
60
80
40
60
80
Euro area
US
0
20
40
0
20
40
2007 2008 2009
US
4
0
20
0
20
2007 2008 2009Source: Thomson Reuters
25.09.2009
3
140
160
140
160Spot
23 09 2009
550550
Food
Oil price (Brent Blend)USD per barrel. Daily figuresJanuary 2002 – April 2012
Commodity pricesIn USD. Index, week 1 2002 = 100 Week 1 2002 – week 38 2009
60
80
100
120
140
60
80
100
120
140 23.09.2009
17.06.2009
250
350
450
250
350
450Copper
Aluminium
Metals
0
20
40
0
20
40
2000 2004 2008 2012
50
150
50
150
2000 2004 2008
5
Sources: Thomson Reuters and Norges Bank
7
8
Spare capacity
OPEC spareproduction capacityMillion barrels per day. Monthlyfigures. Jan. 2000 – Dec. 2010
Inventories of crude oil and refined products in US Billion barrels. Jan. 2003 – Sept. 2009
1.10
1.15
1.10
1.15
3
4
5
6Projections EIA
0.90
0.95
1.00
1.05
1.10
0.90
0.95
1.00
1.05
1.10
6
0
1
2
2000 2002 2004 2006 2008 2010
0.80
0.85
0.90
0.80
0.85
0.90
Jan Apr Jul Oct
Min-max 2003-200820092008Average 2003-2008
Source: EIA
25.09.2009
4
Effective exchange rates1)
Indexed 2000 = 100. Weekly figures. Week 1 2000 – Week 38 2009
160160Australia
New Zealand
100
120
140
100
120
140 Canada
Norway
8080
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
7
Sources: Reuters EcoWin and Norges Bank1) A rising curve denotes a stronger exchange rate.
Real exchange ratesDeviation from mean1970 – 2008. Per cent. 1970 – 20091)
15
20
25
15
20
25
Relative consumer prices
Relative wages
-10
-5
0
5
10
15
-10
-5
0
5
10
15 Relative wages
-20
-15
-20
-15
1970 1975 1980 1985 1990 1995 2000 2005
8
1) Data for 2009 based on observation in period to 19 September. Squares show average for this period. A rising curve indicates weaker competitiveness.
Sources: Statistics Norway, Technical Reporting Committee on IncomeSettlements, Ministry of Finance and Norges Bank
25.09.2009
5
Actual and expected key rates1)
Per cent. January 2007 – December 2012
6
7
6
7US Euro area Norway UK
2
3
4
5
6
2
3
4
5
6
0
1
0
1
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
9
Sources: Thomson Reuters, Bloomberg and Norges Bank1)As of 23 September 2009
InflationTwelve-month change. Per cent
6
7
6
7US Euro area
Trading partners Norway
0
1
2
3
4
5
0
1
2
3
4
5 Trading partners Norway
-3
-2
-1
-3
-2
-1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
10
Sources: Thomson Reuters and Norges Ban
25.09.2009
6
Inflation10-year moving average1) and variation2) in CPI3). Per cent. 1980 – 2009
12
14
12
14Variation
CPI
2
4
6
8
10
2
4
6
8
10 Inflation target
00
1980 1985 1990 1995 2000 2005
Sources: Statistics Norway and Norges Bank
1) The moving average is calculated 7 years back and 2 years ahead.2) The band around the CPI is the variation in the CPI adjusted for tax changes and excluding energy products in the average period, measured by +/- one standard deviation.3) Estimate based on projection for 2009 – 2011 from MPR 2/09.
11
InflationActual and projections from MPR 2/09 (broken line). 12-month changePer cent. January 2004 – September 2009
5
6
5
6
0
1
2
3
4
5
0
1
2
3
4
5CPI CPIXE
-2
-1
0
-2
-1
0
2004 2005 2006 2007 2008 2009
12
Sources: Statistics Norway and Norges Bank
25.09.2009
7
Countercyclical policy with unconventionalmeasures
• Expansive fiscal policyL k t• Low key rate
• Extraordinary monetary policy meassures• Swap arrangement• Liquidity supply
• Other extraordinary measures• Norwegian State Finance Fund • Norwegian State Bond Fund• Export finance
13
9
10
11
9
10
11
Costs for money market funding and long-term funding Per cent. Weekly figures. Week 24 2007 – week 39 2009
Difference between 3-month money market rate and key
Premium on long-term funding(5-year bank bond) 2)
2
3
4
5
6
7
8
9
2
3
4
5
6
7
8
9 money market rate and keypolicy rate Price in
swap arrangement1)
Key policy rate
14
Sources: DnB NOR Markets and Norges Bank
0
1
2
0
1
2
Jan-07 Jun-07 Nov-07 Apr-08 Sep-08 Feb-09 Jul-091) Maturity-adjusted price2) 5-year bank bonds issued by banks with total assets of
NOK 5-15 billion and a BBB+ rating
25.09.2009
8
Banking sector liquidityBillions of NOK
110
150
110
150Norges Bank's liquidity supply
Structural liquidity
Projections
-50
-10
30
70
-50
-10
30
70Banks' deposits in Norges Bank
-130
-90
-130
-90
Jan-07 Jun-07 Nov-07 Apr-08 Sep-08 Feb-09 Jul-09 Dec-09Source: Norges Bank
Government net assets as share of GDPPer cent. 1970 - 2010
150150
-50
0
50
100
-50
0
50
100
US Japan Sweden
-150
-100
-150
-100
1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010
Norway Finland
16
Source: OECD
25.09.2009
9
ExportSeasonally adjusted quarterly figures, external trade in goods. Quarterly growth. Volume. Per cent. 2007 Q1 – 2009 Q2
54
-5
0
-6
-4
-2
0
2
-10-10
-8
Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09
Source: Statistics Norway
17
Index of commodity consumption Volume. Seasonally adjusted index January 2004 – July 2009
Spending on services and hotel occupancy rate4-quarter change. Per cent2004 Q1 – 2009 Q2
168Spending on services (left-hand scale)
170170
0
4
8
12
0
2
4
6 Hotel occupancy (right-hand scale)
140
150
160
140
150
160
Sources: Statistics Norway
18
-8
-4
-4
-2
2006 2007 2008 2009
130
0
130
0
2006 2007 2008 2009
25.09.2009
10
Petroleum investmentAnnual volume growth. Per cent. 2008 – 20121)
7
8
7
8
2
3
4
5
6
2
3
4
5
6
0
1
2
0
1
2
2008 2009 2010 2011 2012Sources: Statistics Norway and Norges Bank
19
1) Projections for 2009 - 2012
Norges Banks Regional Network
•Established in 2002.
I t t t f d i i
REGION CENTRAL NORWAY Centre for Economic Research at the Norwegian University of Science and Technology
REGION NORTH Kunnskapsparken Bodø Bodø
REGION NORTH-WEST Møreforsking Molde Molde
•Important part of decision-making basis for Norges Bank’sExecutive Board in conduct ofmonetary policy.
•Accurate projections possiblelong before official statistics areavailable.
20
REGION INLAND Østlandsforskning Lillehammer
REGION EAST Norges Bank
REGION SOUTH AgderforskningKristiansand
•Next report available 14 October.
Source: Norges Bank
REGION SOUTH-WESTInternational
Research Institute of Stavanger
Stavanger
25.09.2009
11
Registered unemploymentPer cent. Seasonally adjusted. Januar y1999 – August 2009
5
6
5
6
Norway Oslo
1
2
3
4
1
2
3
4Akershus
0
1
0
1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Sources: Statistics Norway, Norwegian Labour and Welfare Administration (NAV) and Norges Bank
21
Work permits – UDIIn thousands. Unadjusted.1 January 2003 – 1 August 2009
120
Population growthand net immigrationIn thousands. 1970-20091)
60
70
40
60
80
100
All permits
10
20
30
40
50
60
Population growth
0
20
2003 2005 2007 2009
Only newEEA countries
-10
0
10
1970 1980 1990 2000
Net immigration
22
Sources: Norwegian Directorate of Immigration (UDI), Statistics Norwayand Norges Bank
1) First half of 2009 population growth: 26 297 and net immigration: 16 579
25.09.2009
12
Regional house prices12-month change. Per cent. January 2006 - august 2009
20
25
20
25
Oslo
5
0
5
10
15
20
5
0
5
10
15
20Norway
Akershus
2006 2007 2008 2009
-15
-10
-5
-15
-10
-5
23
Sources: Statistics Norway, Norwegian association of Real Estate Agents, Association of Real Estate Agency Firms, ECON Pöyry, Finn.no, and Norges Bank
Bank credit standards for businesses and households2007 Q4 – 2009 Q3. Change in credit standards since previous period1)
60
90
60
90
H h ld
-60
-30
0
30
-60
-30
0
30
Businesses Households
Easing
Tightening
24
Source: Norges Bank
-90
07 Q4
08 Q1
08 Q2
08 Q3
08 Q4
09 Q1
09 Q2
09 Q3
07 Q4
08 Q1
08 Q2
08 Q3
08 Q4
09 Q1
09 Q2
09 Q3
-90
1) Red diamonds indicate expected developments, and blue bars indicate actual developments
25.09.2009
13
Indicative credit spreads between corporate and government bonds 5-year bonds. Compared with swap rates. Percentage points. Weekly figures. Week 1 2007 – week 36 2009
3 03 0
Interest margin and lending rates to firmsPercentage points. Quarterly figures. December 2004 – July 2009
1.0
1.5
2.0
2.5
3.0
1.0
1.5
2.0
2.5
3.0
3
4
5
6
7
8
3
4
5
6
7
8
0.0
0.5
0.0
0.5
2007 2008 2009
0
1
2
0
1
2
2007 2008 2009
Interest margin firms
Lending rates to firms
Sources: Statistics Norway and DnB NOR Markets
6
7
6
7
Key policy rateActual developments and projection. Per cent. 2005 – 2012
2
3
4
5
6
2
3
4
5
6 Alternative with
higher demand,
MPR 2/09
0
1
0
1
2005 2006 2007 2008 2009 2010 2011 2012
26
Source: Norges Bank
MPR 2/09
25.09.2009
14
Outlook for the Norwegian economy
Governor Svein Gjedrem, Norges Bank, 25 September 2009
