Charts for Inflation report 1/2004
Summary
Chart 1 Projections for CPI-ATE1) and the output gap2). Per cent
-2
-1
0
1
2
3
2002 2003 2004 2005 2006-2
-1
0
1
2
3
1) CPI-ATE: CPI adjusted for tax changes and excl. energy products2)The output gap is a measure of the difference between actual and trend output. See box in IR 1/03
Sources: Statistics Norway and Norges Bank
CPI-ATE
Output gap
Chart 2 CPI-ATE. Total and by supplier sector. 12-month rise. Per cent. Jan 2001 - Dec 2006
-6
-4
-2
0
2
4
6
2001 2002 2003 2004 2005 2006 2007-6
-4
-2
0
2
4
6
Sources: Statistics Norway and Norges Bank
Goods and services produced in Norway
CPI-ATE
Imported consumer goods
Chapter 1
1.1 The economic situation
-4
-2
0
2
4
1980 1984 1988 1992 1996 2000-4
-2
0
2
4
1)GDP figures for 2003 are based on projections.
Sources: Statistics Norway and Norges Bank
Chart 1.1 The output gap. Percentage deviation from trend mainland GDP. Annual figures. 1980-20031)
Chart 1.2 Real interest rate after tax.1) Quarterly figures. 1985 Q1 - 2004 Q12).
-3
0
3
6
9
1985 1988 1991 1994 1997 2000 2003-3
0
3
6
9
1) 3-month money market rates deflated by the CPI excluding energy products up to 1995, Norges Bank`s estimates for the CPI adjusted for tax changes and excluding energy products from June 1995 to July 2000, then the CPI-ATE. The same deflator is used for 5-year government bond yields, but from 2001 Q2 the inflation target of 2.5 per cent is used
2) The figure for 2004 Q1 is preliminary
Sources: Statistics Norway and Norges Bank
3-month rate
5-year rate
2.22
2.24
2.26
2.28
2.30
1998 1999 2000 2001 2002 2003 20042.22
2.24
2.26
2.28
2.30
Source: Statistics Norway
Chart 1.3 Employed persons according to LFS. In millions. Monthly figures. Jan 1998 – Dec 2003. Seasonally adjusted.
-15
-10
-5
0
5
10
15
20
1970 1980 1990 2000-15
-10
-5
0
5
10
15
20
1) Hourly labour costs in manufacturing 2) Projections for wage growth in 2004. The projection for relative labour costs in common currency in 2004 is based on the assumption for the krone exchange rate in this report (TWI).
Sources: TRCIS, Ministry of Finance and Norges Bank
Chart 1.4 Relative labour costs¹): Norway and trading partners. Deviation from average 1970 -2003. Per cent. Annual figures. 1970 -20042)
Local currency
Common currency
2004
1.2 Consumer price inflation
Chart 1.5 CPI-ATE. Total1) and by supplier sector2). 12-month rise. Per cent. Jan 1999 - Jan 2004
-6
-4
-2
0
2
4
6
1999 2000 2001 2002 2003 2004-6
-4
-2
0
2
4
6
1) Norges Bank's estimates up to and including July 2000, thereafter figures published by Statistics Norway2) Norges Bank's estimates
Sources: Statistics Norway and Norges Bank
Goods and services produced in Norway
CPI-ATE
Imported consumer goods
Chart 1.6 Prices for some imported consumer goods.1) 12-month rise. Per cent. Jan 2001 - Jan 2004
-15
-10
-5
0
5
2001 2002 2003 2004-15
-10
-5
0
5
1) CPI adjusted for tax changes and excluding energy products. Percentage share of CPI-ATE in brackets
Sources: Statistics Norway and Norges Bank
Cars (9)
Clothing and footwear (7)
Audiovisual equipment (3)
-1
0
1
2
3
4
5
6
1999 2000 2001 2002 2003 2004-1
0
1
2
3
4
5
6
1) CPI adjusted for tax changes and excluding energy products. Norges Bank's estimates
Sources: Statistics Norway and Norges Bank
Chart 1.7 CPI-ATE. Domestically produced goods1). 12-month rise. Per cent. Jan 1999 – Jan 2004
Goods produced in Norway which are influenced to only a limited extent by
global market prices
Goods produced in Norway which are influenced by global market prices
Chart 1.8 Consumer prices. Total and adjusted for tax changes and excluding energy products. 12-month rise. Per cent. Jan 1999 - Jan 2004.
-3-2-10123456
1999 2000 2001 2002 2003 2004-3-2-10123456
1) Norges Bank's estimates up to and including July 2000, thereafter figures published by Statistics Norway
Sources: Statistics Norway and Norges Bank
CPI
CPI-ATE1)
Chart 1.9 Electricity prices. Index. 1 Jan 1998=100. Daily figures. 1 Jan 2001 – 4 Mar 2004.
50
100
150
200
250
300
350
2001 2002 2003 200450
100
150
200
250
300
350
Sources: Statistics Norway, Nordpool, the Norwegian Water Resources and Energy Directorate and Norges Bank
Electricity in the CPI
Spot price including taxes and grid rental
1.3 Financial markets
Chart 1.10. Interest rate expectations. Actual developments and expected key rate1) at 4 March 2004. Daily figures
0
2
4
6
2003 2004 20050
2
4
6
1) Based on interest rates on 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
UK
Euro area
US
Norway
Source: Bloomberg
Chart 1.11 Yield on government bonds with 10 year residual maturity. Daily figures. 1 Jan 2003 - 4 Mar 2004.
3
4
5
6
jan. 03 apr. 03 jul. 03 okt. 03 jan. 043
4
5
6
US
Germany
Norway
Chart 1.12 International equity indices. 1 Jan 2003 = 100 Daily figures. 1 Jan 2003 – 4 Mar 2004.
80
100
120
140
160
180
Jan-03 Apr-03 Jul-03 Oct-03 Jan-0480
100
120
140
160
180
Source: Bloomberg
Norway OBX
US S&P 500
Germany DAX
Japan NIKKEI
Chart 1.13. Change in 3-month money market rates and effective exchange rates1). 23 Oct 2003 – 4 Mar 2004.
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
-150 -100 -50 0 50 100
1) A positive figure denotes a stronger exchange rate
Sources: Bank of England and Bloomberg
nok
usd
cadchfsek
eur
jpy
gbp
nzd
aud
Interest rate change. Basis points
Exch
ange
rate
cha
nge.
Per
cen
t
Chart 1.14. Individual exchange rate movements.1) Effective rates. Index. 1 Jan 2002=100. Daily figures. Jan 2002 – 4 Mar 2004.
70
80
90
100
110
120
130
140
Jan-02 Jul-02 Jan-03 Jul-03 Jan-0470
80
90
100
110
120
130
140
1) A rising curve denotes a stronger exchange rate
Source: Bank of England
NZD
EUR
USD
AUD
NOK
GBP
Chart 1.15. Exchange rate for NOK against EUR, USD and SEK.1) Daily figures. 1 Jan 2002 – 4 Mar 2004.
6.00
6.50
7.00
7.50
8.00
8.50
9.00
9.50
Jan-02 Jul-02 Jan-03 Jul-03 Jan-0475
80
85
90
95
100
105
110
1) A rising curve denotes a weaker krone exchange rate
Source: Bloomberg
NOK/USD (left-hand
scale)
NOK per 100 SEK (right-hand scale)
NOK/EUR (left-hand scale)
1.4 Monetary Policy
Chart 1.16 Projections for CPI-ATE and the output gap1) in IR 3/03. Per cent
1) The output gap is a measure of the difference between actual and trend output. See box in IR 1/03
Sources: Statistics Norway and Norges Bank
CPI-ATE
Output gap
-2
-1
0
1
2
3
2002 2003 2004 2005 2006-2
-1
0
1
2
3
Chart 1.17 CPI. Moving 10-year average (7 years back, current year and 2 years ahead). Per cent.
0
2
4
6
8
10
12
14
1979 1984 1989 1994 1999 20040
2
4
6
8
10
12
14
CPI1)
Inflation target
1) The band around the CPI is the variation in the period, measured by +/- one standard deviation
Sources: Statistics Norway and Norges Bank
Source: Norges Bank
Chart 1.18 Strategy intervals for the sight deposit rate and actual developments. Nov. 2002 - Mar 2004.
Interval in Strategy Document 1/03Sight deposit
rate
Interval in Strategy Document 3/02
Interval in Strategy Document 2/03
Interval in Strategy Document 3/03
0
1
2
3
4
5
6
7
8
nov. 02 mar. 03 jul. 03 nov. 03 mar. 040
1
2
3
4
5
6
7
8
Chart 1.19 Interest rate expectations in the US Actual developments and expected key rate1). Daily figures
0
2
4
6
1999 2000 2001 2002 2003 2004 20050
2
4
6
Key rate
23 Oct 03
16 Dec 03
19 Jan 04
1) Based on Fed Funds futures and Eurodollar futures adjusted for the estimated spread between the 3-month Libor and Fed Funds rates
Sources: Bloomberg, Reuters and Norges Bank
Chart 1.20 Interest rate expectations in the euro area. Actual developments and expected key rate1). Daily figures
0
2
4
6
1999 2000 2001 2002 2003 2004 20050
2
4
6
Key rate
23 Oct 03
16 Dec 03
20 Jan 04
1) Based on Euribor futures adjusted for the estimated spread between the 3-month Euribor and Refi rates
Sources: Bloomberg, Reuters and Norges Bank
1) A rising curve denotes a stronger krone exchange rate
Source: Norges Bank
Chart 1.21 Import-weighted krone exchange rate1), sight deposit rate and 3-month interest rate differential against trading partners. Daily figures. 1 Jan 2002 – 4 Mar 2004
85
90
95
100
105
1102002 2003 2004
-2
0
2
4
6
8
10
I-44 (left-hand scale)
Sight deposit rate (right-hand scale)
Interest rate differential 3-month (right-hand
scale)
Chapter 2
Chart 2.1 GDP growth in the US, Japan, the euro area and among Norway's trading partners combined. Quarterly growth. Per cent. 01 Q1 - 04 Q3. Seasonally adjusted
-2
-1
0
1
2
-2
-1
0
1
2
2001 2002 2003
Sources: EcoWin/US Department of Commerce, ESRI (JP) EURO-OP/Eurostat and Norges Bank
US Euro area
JapanTrading partners
Chart 2.2 Employment. 12-month growth. Per cent. Jan 1997 - Jan 2004.
-3
-2
-1
0
1
2
3
4
1997 1999 2001 2003-3
-2
-1
0
1
2
3
4
Sources: EcoWin, Bureau of Labor Statistics (US), Federal Statistical Office (DE), Office of National Statistics (UK) and SCB (SE)
SwedenUS
UK
Germany
Chart 2.3 Structural budget balance. Per cent of GDP. Annual figures. 1995 - 20051).
-8
-6
-4
-2
0
2
1995 1997 1999 2001 2003 2005-8
-6
-4
-2
0
2
1) Projections for period 2003-2005
Source: OECD
Euro area
US
Japan
Chart 2.4 Annual wage growth1). Per cent. 1995 – 20052).
-2
0
2
4
6
1995 1997 1999 2001 2003 2005-2
0
2
4
6
1) Wage growth excluding public sector2) Projections for period 2003-2005
Source: OECD
Euro area
US
Japan
Chart 2.5 12-month rise in CPI. Per cent. Jan 2002 - Feb 2004
0
2
4
6
jan. 02 jul. 02 jan. 03 jul. 03 jan. 040
2
4
6
Sources: EcoWin, EUR-OP/Eurostat, Federal Statistical Office (DE), Central Statistics Office (IRL) and Central Bureau of Statistics (NL)
Ireland
Germany
Portugal
Netherlands
Sources: London Metal Exchange and EcoWin
Chart 2.6 Prices for aluminium, nickel and copper in USD. Index. 2001=100. Daily prices. 1 Jan 2001 – 4 Mar 2004
0
100
200
300
2001 2002 2003 20040
100
200
300
Copper
Nickel
Aluminium
Chart 2.7 GDP in China, Japan and Malaysia. Change on same quarter previous year. Per cent. 2001 Q1 - 2004 Q3
-4
-2
0
2
4
6
8
10
2001 2002 2003-4
-2
0
2
4
6
8
10
China
Japan
Sources: EcoWin, Statistics Japan, National Bureau of Statistics (CH) og Central Bank of Malaysia
Malaysia
Sources: EcoWin and Norges Bank
Chart 2.8 Oil price measured in USD and EUR per barrel. 14-day moving average. Daily prices. 18 Jan 2002 – 4 Mar 2004
15
20
25
30
35
Jan-02 Jul-02 Jan-03 Jul-03 Jan-0415
20
25
30
35
Dollar per barrel
Euro per barrel
1) Brent Blend
Sources: International Petroleum Exchange and Norges Bank
Chart 2.9 Oil price1) in USD per barrel. Daily figures. 1 Jan 2001 – 4 Mar 2004. Futures prices from 4 Mar 2004.
15
20
25
30
35
2001 2002 2003 2004 2005 200615
20
25
30
35
Oil price
Futures prices 4 Mar 04
Chart 2.10 Consumer price inflation in the US, the euro area, Japan and among Norway's trading partners. Annual rise. 1995 - 20061)
-2
0
2
4
1995 1997 1999 2001 2003 2005-2
0
2
4
1) Projections for period 2004-2006
Sources: OECD, EU Commission and Norges Bank
Trading partners
Euro areaUS
Japan
Chapter 3
0
2
4
6
8
10
2001 2002 2003 2004 2005 20060
2
4
6
8
10
Chart 3.1 Assumption for the money market rate. Forward rate1) 2). Per cent
1) 3-month money market rates up to February 2004. 3-month forward rates are estimated using four money market rates and four government bond yields with different maturities as observed on 4 March.2) The money market rate is normally about ¼ percentage point higher than the sight deposit rate Source: Norges Bank
Forward rate4 March
3-month money market rate
Chart 3.2 Assumption for the krone exchange rate (I-44). Forward rates. Index1)
80
90
100
110
2001 2002 2003 2004 2005 200680
90
100
110
1) A rising curve denotes a weaker krone exchange rate
Source: Norges Bank
Forward rate 4 March
Import-weighted exchange rate, I-44
Chart 3.3 Sight deposit rate, 5-year swap rate and implied one-year swap rate 4 years ahead1). Weekly figures. 7 Jan 2002 - 4 Mar 2004.
0
1
2
3
4
5
6
7
8
jan. 02 jul. 02 jan. 03 jul. 03 jan. 040
1
2
3
4
5
6
7
8
1) Implied 1-year rate 4 years ahead is estimated using 4- and 5-year swap rates. Since 2002, the 5-year swap rate has been ½ percentage point higher than government bond yields on average.Sources: Norges Bank and EcoWin
Sight deposit rate
5-year rate
Implied 1-year rate 4 years ahead
Chart 3.4 Real growth in household disposable income and consumption. Annual figures. Per cent. 1990 - 2006.
0
2
4
6
8
10
1990 1993 1996 1999 2002 20050
2
4
6
8
10
Sources: Statistics Norway and Norges Bank
Real income growth
Real growth in consumption
Chart 3.5 Consumer confidence indicator.1)
1999 Q1 - 2004 Q1. Unadjusted figures.
-30
-15
0
15
30
45
1999 2000 2001 2002 2003 2004-30
-15
0
15
30
45
Total
Personal financial situation
Country's economic situation
1) Provides an indication of the share with a positive assessment of the current situation and outlook for the future less the share with a negative assessment.
Source: TNS Gallup
Chart 3.6 Vacant office premises in Oslo, Asker and Bærum. Share of total real estate stock. 1991-20041)
0
2
4
6
8
10
12
1991 1994 1997 2000 20030
2
4
6
8
10
12
1) As at February
Source: Eiendomsspar AS
-12
-8
-4
0
4
8
12
16
20
1972 1976 1980 1984 1988 1992 1996 2000-6
-4
-2
0
2
4
6
8
10
Chart 3.7 Productivity growth and real growth in value added in commercial services. 2-year moving average. Annual figures. Per cent. 1972-2003.
Sources: Statistics Norway and Norges Bank
Productivity (right-h. scale)Output (left-hand scale)
-8,7
Chart 3.8 Gross investment as a share of value added. Annual figures. 1985 -2006.
0.00
0.05
0.10
0.15
0.20
0.25
1985 1990 1995 2000 20050.00
0.05
0.10
0.15
0.20
0.25
Sources: Statistics Norway and Norges Bank
Services and distributive trades
Average last 10 yearsManufacturing
and construction
-15
-10
-5
0
5
10
15
20
1970 1980 1990 2000-15
-10
-5
0
5
10
15
20
1) Hourly labour costs in manufacturing2) Projections for wage growth in 2004. The projection for relative labour costs in common currency in 2004 is based on the assumption for the krone exchange rate in this report (TWI).
Sources: TRCIS, Ministry of Finance and Norges Bank
Chart 3.9 Relative labour costs¹): Norway and trading partners. Deviation from average 1970 -2003. Per cent. Annual figures. 1970 -20042)
Local currency
Common currency
2004
Chart 3.10 Growth in local government income and activity and nominal growth in mainland GDP. Annual figures. Per cent. 1990-2003.
0
2
4
6
8
10
12
14
1990 1992 1994 1996 1998 2000 20020
2
4
6
8
10
12
14
Sources: The Technical Reporting Committee on Local Government Finance and Statistics Norway
Income growthActivity growthGrowth in mainland GDP
Chart 3.11 Local government surplus before loan transactions, net debt and net operating profit/ loss. Percentage of operating income. 1990-2003.
0
10
20
30
40
50
1990 1992 1994 1996 1998 2000 2002-8
-4
0
4
8
12Surplus1) (right-hand scale)Net debt2) (left-hand scale)Net operating profit/loss (right-hand scale)
1) Surplus before loan transactions2) Excluding claims on local government enterprises
Sources: The Technical Reporting Committee on Local Government Finance
Chart 3.12 Employment and labour force. In millions. Monthly figures. Jan 1999 - Dec 2003. Seasonally adjusted.
2.20
2.25
2.30
2.35
2.40
1999 2000 2001 2002 2003 20042.20
2.25
2.30
2.35
2.40
Source: Statistics Norway
Employment
Labour force
Chart 3.13 Number of new vacancies advertised, per business day. Monthly figures. Jan 2000 - Feb 2004. Seasonally adjusted.
0
300
600
900
1200
2000 2001 2002 2003 20040
300
600
900
1200
Source: Directorate of Labour
Chart 3.14 Change in employment on previous year. Per cent. Unemployment1) as a percentage of the labour force. Annual figures. 1980-2006.
0
2
4
6
1980 1985 1990 1995 2000 2005-4
-2
0
2
4
1) LFS unemployment
Sources: Statistics Norway and Norges Bank
LFS unemployment(left-hand scale)
Numbers employed(right-hand scale)
Chapter 4
0
2
4
6
8
10
2001 2002 2003 2004 2005 20060
2
4
6
8
10
Chart 4.1 Assumption for the money market rate. Forward rate1) 2). Per cent.
1) 3-month money market rates up to and including February 2004. 3-month forward rates are estimated using four money market rates and four government bond yields with different maturities as observed on 4 March.2) The money market rate is normally about ¼ percentage point higher than the sight deposit rate.Source: Norges Bank
Forward rate4 March
3-month money market rate
Chart 4.2 Assumption for the krone exchange rate (I-44). Forward rates. Index1).
80
90
100
110
2001 2002 2003 2004 2005 200680
90
100
110
1) A rising curve denotes a weaker krone exchange rateSource: Norges Bank
Forward rate 4 March
Import-weighted exchange rate, I-44
Chart 4.3 Projections for CPI-ATE and the output gap1). Per cent.
-2
-1
0
1
2
3
2002 2003 2004 2005 2006-2
-1
0
1
2
3
1) The output gap is a measure of the difference between actual and trend output. See box in IR 1/03
Sources: Statistics Norway and Norges Bank
CPI-ATE
Output gap
Chart 4.4 Projected external price movements for some imported consumer goods. Measured in trading partners' currencies. Quarterly figures. Index. 1991 Q1= 100. 1991 Q1 – 2003 Q3
60
70
80
90
100
110
1991 1993 1995 1997 1999 2001 200360
70
80
90
100
110
Sources: EcoWin and Norges Bank
Clothing
Footwear
Audiovisual equipment
Chart 4.5 Consumer goods imports from central Europe1) and China as a share of total consumer goods imports. Per cent. Annual figures. 1990-20032).
0
2
4
6
8
10
12
1990 1992 1994 1996 1998 2000 20020
2
4
6
8
10
12
China
Central Europe
1) Central Europe: Slovenia, Bulgaria, Czech Republic, Estonia, Latvia, Lithuania, Slovakia, Poland and Hungary2) Figures for 2003 from January to November Source: Statistics Norway
Chart 4.6 Consumer prices for audiovisual equipment in Norway and other countries. 12-month rise. Per cent. Jan 1995 - Jan 2004.
-15
-10
-5
0
5
1995 1997 1999 2001 2003-15
-10
-5
0
5
Sources: EcoWin and Statistics Norway
Norway
SwedenGermany
Chart 4.7 Indicator of external price impulses to consumer goods measured in foreign currency. Historical developments and projections. Annual figures. 1995-2006
-3
-2
-1
0
1
2
3
1995 1997 1999 2001 2003 2005-3
-2
-1
0
1
2
3
Source: Norges Bank
Chart 4.8 Prices for consumer goods imports in the CPI and in External Trade Statistics projected two quarters ahead, and I-44 projected three quarters ahead. 4-quarter rise. Per cent. 98 Q1 - 04 Q3
-15
-10
-5
0
5
10
1998 2000 2002 2004-15
-10
-5
0
5
10
1) Our estimates: Clothing and accessories, footwear, furniture, food and beverages2) Excluding audiovisual equipment and cars Sources: Statistics Norway and Norges Bank
I-44
Imported consumer goods in External Trade Statistics1)
Consumer goods imports in CPI2)
Chart 4.9 Prices for air travel. Adjusted for taxes. 12-month rise. Jan 2001 - Jan 2004.
-20
-10
0
10
20
30
2001 2002 2003 2004-20
-10
0
10
20
30
Sources: Statistics Norway and Norges Bank
Chart 4.10 Annual wage growth1) and unemployment rate2). Per cent. Annual figures. 1993 -2006.
0
2
4
6
1993 1995 1997 1999 2001 2003 20050
2
4
6
1) Average for all groups. Including cost of additional vacation days2) LFS
Sources: Technical Reporting Committee on Income Settlements, Statistics Norway and Norges Bank
Unemployment rate
Annual wage growth
0
1
2
3
4
5
6
7
0 2 4 6 80
1
2
3
4
5
6
7
02-0300-01
98-99
96-97
94-95
Registered unemployed and persons on labour market programmes as a percentage of the labour force
Annu
al w
age
grow
th (i
ncl.
cost
of
addi
tiona
l vac
atio
n da
ys)
Chart 4.11 Annual wage growth and unemployment. 2-year average
04-05
Sources: Technical Reporting Committee on Income Settlements, Directorate of Labour and Norges Bank
Chart 4.12 Expected consumer price inflation in 5 years. Per cent. Quarterly figures. 02 Q2 - 04 Q1
0
1
2
3
4
Jun-02 Dec-02 Jun-03 Dec-030
1
2
3
4
Experts
Employer organisations
Source: TNS Gallup
Employee organisations
Chart 4.13 Expected consumer price inflation in 2 years. Per cent. Quarterly figures. 02 Q2 - 04 Q1
0
1
2
3
4
Jun-02 Dec-02 Jun-03 Dec-030
1
2
3
4
Experts
Employer organisations
Source: TNS Gallup
Employee organisations
Chart 4.14 CPI-ATE. Total and by supplier sector. Historical developments and projections. 12-month rise. Per cent. Jan 2001 - Dec 2006
-6
-4
-2
0
2
4
6
2001 2002 2003 2004 2005 2006 2007-6
-4
-2
0
2
4
6
Sources: Statistics Norway and Norges Bank
Goods and services produced in Norway
CPI-ATE
Imported consumer goods
Chart 4.15 CPI-ATE. Historical developments and projections1). Seasonally adjusted 3-month moving average, annualised, and 12-month rise. Oct 2003 - Nov 2004
-3
-2
-1
0
1
2
3
Oct-03 Jan-04 Apr-04 Jul-04 Oct-04-3
-2
-1
0
1
2
3
Projections
1) The columns show 3-month moving average. The curves show the 12-month rise.
Sources: Statistics Norway and Norges Bank
Historical
-2
0
2
4
6
2001 2002 2003 2004 2005 2006-2
0
2
4
6
Chart 4.16 CPI and CPI-ATE. Historical developments and projections. 12-month rise. Per cent. Jan 2001 - Dec 2006
CPI
CPI-ATE
Sources: Statistics Norway and Norges Bank
Chart 4.17 Projections and uncertainty for CPI-ATE. 12-month rise. Per cent. Jan 2001 - Dec 2006
-1
0
1
2
3
4
5
2001 2002 2003 2004 2005 2006-1
0
1
2
3
4
530% 50% 70% 90%
The bands in the fan indicate different probabilities for developments in the CPI-ATE.
Sources: Statistics Norway and Norges Bank
Charts for boxes and appendices
Low external price impulses to the Norwegian economy
Chart 1 Projected external price developments for some imported consumer goods. Measured in trading partners' currencies. Quarterly figures. Index. 91 Q1= 100. 91 Q1 - 03 Q3
60
70
80
90
100
110
120
1991 1994 1997 2000 200360
70
80
90
100
110
120
Source: Norges Bank
Furniture and household appliances
Audiovisual equipment
Footwear
Cars
Other goods
Clothing
Chart 2 Foreign producer prices and a new indicator of external price impulses to consumer goods Measured in trading partners' currencies. Quarterly figures. Index. 1991 Q1=100. 1991 Q1 - 2003 Q3
95
100
105
110
115
120
1991 1994 1997 2000 200395
100
105
110
115
120
Source: Norges Bank
New indicator of external price impulses to consumer goods
Producer prices 25 traditional trading partners
Pass-through from the krone exchange rate to prices for imported
consumer goods
-3.00
-2.50
-2.00
-1.50
-1.00
-0.50
0.00
0.50
1.00
Source: Norges Bank
Earlier estimate
New estimate
Chart 1 Estimated effects on price inflation for imported consumer goods in the CPI-ATE of a 10 per cent sustained strengthening of the import-weighted krone exchange rate. Percentage points
Year 2 Year 3Year 1 Year 4
Chart 2 Historical movements in prices for imported consumer goods and estimated effects of external prices, exchange rate movements and the output gap. Contribution in percentage points to 4-quarter rise. 2001 Q1 – 2003 Q4
-5
-4
-3
-2
-1
0
1
2
2001 2002 2003-5
-4
-3
-2
-1
0
1
2
Sources: Statistics Norway and Norges Bank
Contribution from output gap
Contribution from exchange rate
Contribution from external prices
Movements in prices for imported consumer goods
Effect of the fall in interest rates on household income
Chart 1 Interest rates on deposits and loans to households and non-profit institutions in domestic financial institutions. Estimated monthly series. Per cent. Jan 2002 - Dec 2003
0
2
4
6
8
10
Jan-02 Jul-02 Jan-03 Jul-030
2
4
6
8
10
Key rate (sight deposit rate)
Loans in banks
Bank deposits
Source: Norges Bank
Loans in government lending institutions
Loans in mortgage companies and life insurance
The krone exchange rate and exchange rate expectations
Chart 1 Effective exchange rates for Norway, Canada and Sweden1). Index. Week 1 1993 = 100. Week 1 1993 - Week 10 2004
70
80
90
100
110
120
130
140
1993 1995 1997 1999 2001 200370
80
90
100
110
120
130
140
Canada
Sweden
Norway
1) A rising curve denotes a stronger exchange rate
Sources: Bank of England and EcoWin
Chart 2 Effective exchange rates for Norway, Australia and New Zealand1). Index. Week 11993 = 100. Week 1 1993 - Week 10 2004
70
80
90
100
110
120
130
140
1993 1995 1997 1999 2001 200370
80
90
100
110
120
130
140
Australia
New Zealand
Norway
1) A rising curve denotes a stronger exchange rate
Sources: Bank of England and EcoWin
Chart 3 Real exchange rates. Deviation from average 1970 -2003. Per cent. Annual figures. 1970 -20041)
-20
-15
-10
-5
0
5
10
15
20
1970 1980 1990 2000-20
-15
-10
-5
0
5
10
15
20
Relative labour costs
Relative prices
1) Based on projections for wage and price inflation for 2004. The krone exchange rate in 2004 is based on the assumptions in IR 1/04 (TWI)
Sources: TRCIS, the Ministry of Finance, Statistics Norway and Norges Bank
2004
Chart 4 TWI and 5-year forward rate1). Daily figures.1 Jan 93 – 4 Mar 04.
90
100
110
120
130
1993 1995 1997 1999 2001 200390
100
110
120
130
1) A rising curve denotes a weaker krone exchange rate
Source: Norges Bank
Introduction of inflation targeting
TWI
TWI forward rate
Chart 5 TWI and expected TWI one year ahead1). Monthly figures. June 1998 - Feb 2004
90
95
100
105
110
115
1998 1999 2000 2001 2002 200390
95
100
105
110
115
Expected TWI
TWI
1) A rising curve denotes a weaker krone exchange rate. Expected TWI is based on Consensus Forecasts.
Sources: Consensus Forecasts and Norges Bank
Evaluation of Norges Bank’s projections for 2003
Chart 1 CPI-ATE projections made at different times. 4-quarter rise
0.00
0.50
1.00
1.50
2.00
2.50
3.00
mai. 01 jan. 02 sep. 02 mai. 03 jan. 040.00
0.50
1.00
1.50
2.00
2.50
3.00
Sources: Statistics Norway and Norges Bank
3/01
1/03
2/02
1/02 3/02
2/03
3/03Actual
Chart 2 CPI-ATE. Projections and actual developments. Total and by supplier sector. 4-quarter rise. Per cent
-6
-4
-2
0
2
4
6
2000 2001 2002 2003-6
-4
-2
0
2
4
6
Sources: Statistics Norway and Norges Bank
Goods and services produced in Norway
CPI-ATE
Imported consumer goods
ActualProjection IR 3/01
Annex 3: Strategy document
-3
0
3
6
9
85 88 91 94 97 00 03-3
0
3
6
9
Chart 1a Real interest rates after tax1). 1985 Q1 - 2003 Q3
5-year rate
3-month rate
1) 3-month rate deflated by CPI excluding energy products up to 1995. Norges Bank's estimates for the CPI adjusted for tax changes and excluding energy products from 1995 to July 2000, then CPI-ATE. The same deflator is used for 5-year government bond yields, but from 2001 Q2 the inflation target of 2.5 per cent is used.
Sources: Statistics Norway and Norges Bank
Chart 1b Import-weighted exchange rate (I-44) and trade-weighted exchange rate index1). Monthly figures. Jan 1971 - Oct 2003
70
80
90
100
110
71 74 77 80 83 86 89 92 95 98 01 0470
80
90
100
110
1) A rising curve denotes a weaker krone exchange rate
Source: Norges Bank
I-44
TWI
-15
-10
-5
0
5
10
15
20
70 73 76 79 82 85 88 91 94 97 00 03-15
-10
-5
0
5
10
15
20
Chart 1c Real exchange rate. Deviation from average 1970-2002. Annual figures. 1970 - 2003. Per cent
1) Average exchange rate at 23 Oct 2003
Sources: TRCIS, Ministry of Finance, Statistics Norway and Norges Bank
Relative labour costs
Relative pricesOctober1)
Chart 1d CPI-ATE. Total and distributed by imported and domestically produced goods and services1). 12-month rise. Per cent
-6
-4
-2
0
2
4
6
Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03-6
-4
-2
0
2
4
6
1) Norges Bank's estimates
Sources: Statistics Norway and Norges Bank
Goods and services produced in Norway
Imported consumer goods
CPI-ATE
Chart 2a Assumption for money market rates. Quarterly figures. 2002 Q1 - 2006 Q4
0
2
4
6
8
2002 2003 2004 2005 20060
2
4
6
8
Source: Norges Bank
Forward rate 23 October
IR 2/03
Chart 2b Assumption for the krone exchange rate (I-44). Quarterly figures. 2002 Q1 - 2006 Q4
85
90
95
1002002 2003 2004 2005 2006 2007
85
90
95
100
Source: Norges Bank
Forward rate 23 October
IR 2/03
Chart 3 Projected CPI-ATE and output gap with forward interest rate and forward exchange rate. Per cent
-1
0
1
2
3
2002 2003 2004 2005 2006-1
0
1
2
3
CPI-ATE(monthly figures)
Output gap (annual figures)
Sources: Statistics Norway and Norges Bank
Chart 4 Taylor rate and expected key rates1). Quarterly figures. 2003 Q3 - 2004 Q4
0
1
2
3
4
5
6
7
Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-040
1
2
3
4
5
6
7
1) The expected key rate is estimated on the basis of 3-month FRA rates in Norway and among trading partners on 23 October 03.
Source: Norges Bank
Taylor rate
Expected key rate in Norway
Expected key rate among trading partners
Appendices 4 and 5
0
2
4
6
8
10
1995 1996 1997 1998 1999 2000 2001 2002 2003 20040
2
4
6
8
10
Source: Norges Bank
Sight deposit rate
3-month money market rate
3-month money-market rate and sight deposit rate. Monthly figures. Jan 1995 - Feb 2004
0
1
2
3
4
5
6
7
1995 1996 1997 1998 1999 2000 2001 2002 2003 20040
1
2
3
4
5
6
7
1) Theoretical ECU rate up to December 1998
Source: Norges Bank
Euro area1)
US
Japan
3-month rates in the US, the euro area and Japan. Per cent. Monthly figures. Jan 1995 - Feb 2004
85
90
95
100
105
110
115
1995 1996 1997 1998 1999 2000 2001 2002 2003 200485
90
95
100
105
110
115
Source: Norges Bank
Import-weighted exchange rate, I-44
(1995=100
Trade-weighted exchange rate index, TWI (1990=100)
Trade-weighted exchange rate index and import-weighted exchange rate I-44. Monthly figures. Jan 1995 - Feb 2004
0
5
10
15
1997 1998 1999 2000 2001 2002 2003 20040
5
10
15
Source: Norges Bank
Credit to households
C2
The credit indicator (C2), credit to households and total credit to the non-financial private sector and municipalities, mainland Norway (C3). 12-month rise. Per cent. Monthly figures. Jan 1997 - Jan 2004
C3 mainland Norway
0
2
4
6
8
10
2001 2002 2003 2004 2005 20060
2
4
6
8
10
Assumption for money market rate. Forward rate. Per cent
Source: Norges Bank
Forward rate4 March
3-month money market rate
Assumptions for the krone exchange rate (I-44). Forward rates. Index
80
90
100
110
2001 2002 2003 2004 2005 200680
90
100
110
Source: Norges Bank
Forward rate 4 March
Import-weighted exchange rate, I-44
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