The economic outlook
Governor Øystein Olsen Norges Bank
29 March 2011
World GDP growth
Contribution from advanced and emerging economies
1). Per cent. 1980 – 2014
2)1980 1984 1988 1992 1996 2000 2004 2008 2012
-2 0 2 4 6
-2 0 2 4 6
Contribution from advanced economies
Contribution from emerging and developing economies World GDP growth
1) IMF grouping of countries (33 advanced and 148 emerging). Current GDP weights (PPP)
2) Norges Bank’s estimate for 26 trading partners, other estimates from IMF Sources: IMF and Norges Bank
Global oil demand
In millions of barrels per day. 1980 - 2010
0 10 20 30 40 50 60
0 10 20 30 40 50 60
1980 1985 1990 1995 2000 2005 2010
OECD Non-OECD
Source: EIA
GDP growth and terms of trade
Real GDP growth.
Per cent. 2000 - 2010
Terms of trade. Index, 2000 Q1 = 100 2000 Q1 – 2010 Q4
2000 2003 2006 2009
-4 -2 0 2 4 6
-4 -2 0 2 4 6
Mainland Norway OECD
90 100 110 120 130 140 150 160
90 100 110 120 130 140 150 160
2000 2003 2006 2009 Total
Mainland Norway
Sources: OECD, Statistics Norway and Norges Bank
Inflation
12-month percentage change
1). January 2001 – December 2010
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
-1 0 1 2 3 4 5
-1 0 1 2 3 4 5
Inflation
Core inflation
Inflation target
1) 5-month moving average. CPI (inflation), CPIXE/CPI-ATE (core inflation) Sources: Statistics Norway and Norges Bank
Krone exchange rate 1) , inflation 2) and Norges Bank key policy rate
January 2001 – December 2010
0 1 2 3 4 5 6
80 90 100 110 120 130 140
2001 2003 2005 2007 2009
Krone exchange rate Inflation Key policy rate
Source: Norges Bank 1) Index, January 2001 – April 2003. A falling curve denotes a stronger krone exchange rate
2) CPIXE. 12-month change. July 2002 – November 2005
0 40 80 120
0 10 20 30
Price level and GDP
Percentage change since the beginning of each decade
Price level (CPI) Mainland GDP at constant prices
2000s
1980s 1980s
2000s
Source: Statistics Norway
Real interest rate
1)Per cent
-1 1 3 5 7 9
Unemployment
2)Percentage of labour force
0 1 2 3 4 5
Monetary policy during economic downturns
August 1987 – February 1990 and June 2008 – December 2010
1987 - 1989
2008 - 2010
2008 - 2010 1987 - 1989
1) 3-monh nominal money market rate deflated by the CPI-ATE. 5-month MA.
2) Registered unemployment. 3-month MA. Sources: Statistics Norway, Norwegian Welfare and Labour Administration and Norges Bank
Fiscal policy
Change in the non-oil budget surplus from 2008 til 2010.
In billions of NOK
0 20 40 60 80 100 120
0 20 40 60 80 100 120
Other resolutions
4 per cent of GPFG 1)
Automatic stabilisers 2)
1) Change in expected return on Government Pension Fund Global (4 per cent of fund’s capital at beginning of year)
2) Change in cyclical adjustments Source: Ministry of Finance
0 20 40 60 80 100 120
0 20 40 60 80 100 120
2000 2005 2010 Q3
Euro area 1) Norway 2)
Household debt
As a percentage of GDP. 2000, 2005 and 2010
1) Household debt from MFI in the euro area
2) C2, households. As a percentage of mainland GDP Sources: ECB, Thomson Reuters, Statsistics Norway and Norges Bank
Household debt burden and interest burden.
Per cent. Quarterly figures. 1988 Q1 – 2014 Q4 1)
0 50 100 150 200 250
0 2 4 6 8 10 12
1988 1992 1996 2000 2004 2008 2012
Interest burden (left-hand scale) Debt burden (right-hand scale)
Sources: Statsistics Norway and Norges Bank
GDP at constant prices
Index, 2007 Q1=100. 2007 Q1 – 2010 Q4
96 98 100 102 104 106 108
96 98 100 102 104 106 108
2007 2008 2009 2010
Mainland Norway US
Euro area
Sources: Statistics Norway and Thomson Reuters
Oil price (Brent Blend)
USD/barrel. 1 January 2003 – 23 March 2011
0 20 40 60 80 100 120 140 160
0 20 40 60 80 100 120 140 160
2000 2002 2004 2006 2008 2010
Source: Thomson Reuters
Terms of trade
Index, 2000 Q1=100. 2000 Q1 – 2010 Q4
90 100 110 120 130 140 150 160
90 100 110 120 130 140 150 160
2000 2002 2004 2006 2008 2010
Total
Mainland Norway
Sources: Statistics Norway and Norges Bank
Net immigration in 2010
By nationality. Number of persons
0 1000 2000 3000 4000 5000 6000 7000 8000
0 1000 2000 3000 4000 5000 6000 7000 8000
Source: Statistics Norway
Capacity utilisation and inflation
Baseline scenario in Monetary Policy Report 1/11.
Per cent. 2008 Q1 – 2014 Q4
-1 0 1 2 3 4 5 6
-4 -3 -2 -1 0 1 2 3 4
2008 2009 2010 2011 2012 2013 2014
Output gap (left-hand scale)
Core inflation (CPIXE, right-hand scale)
Source: Norges Bank
0 1 2 3 4 5 6 7
0 1 2 3 4 5 6 7
2008 2009 2010 2011 2012 2013 2014
Baseline scenario from
Monetary Policy Report 1/11
Source: Norges Bank
