Monetary Policy Report 2/12

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Monetary Policy Report 2/12

Charts

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3 4 5 6 7 8

15 20 25 30 35 40

Chart 1.1 Yields on 10-year government bonds.

Percent. 1 January 2010 – 15 June 2012

Greece (left-hand scale) Germany

Spain Italy

0 1 2

0 5 10

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12

Source: Thomson Reuters

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40 60 80 100 120

Chart 1.2 Developments in equity markets. Index.

1 January 2008 = 100. 1 January 2008 – 15 June 2012

0 20 40

Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12

US Euro area Norway

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2 3 4

Chart 1.3 CDS premiums in Europe.

Itraxx-government Itraxx-finance Itraxx-corporate

0 1

Source: Bloomberg

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1 2 3 4 5 6

Chart 1.4 Projections of GDP growth for 2012 and 2013.

Annual change. Percent

2012 2013

-1 0 1

Euro area US Emerging

markets

Trading partners

Sources: IMF, Thomson Reuters and Norges Bank

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2 3 4 5 6

Chart 1.5 Key rates and estimated forward rates as at 9 March 2012 and 15 June 2012.¹⁾ Percent. 1 January 2008 – 31 December 2015²⁾

US

Euro area³⁾

UK MPR 1/12 MPR 2/12

0 1 0

1

2008 2009 2010 2011 2012 2013 2014 2015

1) Broken lines show estimated forward rates as at 9 March 2012. Thin lines show forward rates as at 15 June 2012. Forward rates are based on Overnight Index Swap (OIS) rates 2) Daily figures from 1 January 2008 and quarterly figures from 2012 Q3

3) EONIA in euro area from 2012 Q3 Sources: Bloomberg and Norges Bank

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2 3 4

Chart 1.6 Difference between 3-month money market rate

and expected key rates¹⁾. Percentage points. 5-day moving average.

1 January 2008 – 15 June 2012

US Euro area Norway

0 1

1) Expected key rates are derived from Overnight Index Swap (OIS) rates.

Norges Bank's projections for market key rate expectations are used for Norway Sources: Bloomberg, Thomson Reuters and Norges Bank

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3 4 5 6 7 8 9 10

Chart 1.7 Key policy rate, premium in the money market¹⁾, risk premium 5-year covered bonds²⁾ and weighted average lending rate on new residential

mortgages³⁾. Percent. 1 January 2008 – 15 June 2012

Risk premium 5-year covered bonds Premium in the money market Key policy rate

Bank lending rate (new residential mortgages)

0 1 2 3

1) 3-month NIBOR (effective)

2) Indicative risk premium on 5-year covered bonds

3) Nominal interest rate on new residential mortgages of NOK 1m within 60% of purchase price with variable interest rate. Figures for the 20 largest banks, weighted according to market share Sources: Norsk familieøkonomi AS, DnB Nor Markets, Statistics Norway and Norges Bank

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4 5 6 7 8 9 10 11

Chart 1.8 Key policy rate, premium on the money market rate¹⁾, risk premium on 5-year bank bonds²⁾ and average interest rate on corporate loans.

Risk premium 5-year bank bonds Premium in the money market Key policy rate

Average interest rate on corporate loans

0 1 2 3

1) 3-month NIBOR (effective)

2) Indicative risk premium on 5-year bank bonds

Sources: DnB Nor Markets, Statistics Norway and Norges Bank

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1 3 5 7

Chart 1.9 GDP growth for Norway and the euro area.

Annual change. Percent. 2000 - 2012¹⁾

Norway Euro area

-5 -3 -1

2000 2002 2004 2006 2008 2010 2012

1) Projections for 2012

Sources: European Commission, Statistics Norway and Norges Bank

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0 5 10 15 20 25

Chart 1.10 Credit growth¹⁾ and house prices.

12-month change. Percent. January 2004 - May 2012²⁾

House prices Credit growth

-15 -10 -5

2004 2006 2008 2010 2012

1) From January 1 2012 the Norwegian standard for institutional sector grouping was changed. For credit growth this implies a break in the series from March 2012

2) House prices up to and including May, credit growth up to and including April. Sources:

Statistics Norway, the real estate sector (NEF, EFF, Finn.no and ECON Pöyry) and Norges Bank

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0 2.5 5 7.5

Chart 1.11 Consumer prices. 12-month change.

Percent. January 2004 – May 2012

CPI 20% trimmed mean

CPI-ATE¹⁾ CPIXE²⁾

CPI-FW³⁾ CPIM⁴⁾

-2.5 0

2004 2005 2006 2007 2008 2009 2010 2011 2012

1) CPI adjusted for tax changes and excluding energy products

2) CPI adjusted for tax changes and excluding temporary changes in energy prices. Real time figures. See Norges Bank Staff Memo 7/2008 and 3/2009

3) CPI adjusted for frequency of price changes. See Norges Bank Economic commentaries 7/2009 4) Model-based indicator of underlying inflation. See Norges Bank Economic commentaries 5/2010 Sources: Statistics Norway and Norges Bank

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4 6 8 10 12 14

Chart 1.12 Inflation. Moving 10-year average¹⁾and variation²⁾in CPI³⁾.

Percent. 1981 – 2012

Variation Inflation target CPI

0 2 4

1981 1986 1991 1996 2001 2006 2011

1) The moving average is calculated 10 years back

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 CPI projections in this Report

Sources: Statistics Norway and Norges Bank

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2.5 5

Chart 1.13 Expected consumer price inflation 2 and 5 years ahead.¹⁾

Percent. 2003 Q1 – 2012 Q2

Expected inflation 5 years ahead Expected inflation 2 years ahead

0 0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1) Average of expectations of employer/employee organisations and economists (financial industry experts and academia)

Sources: TNS Gallup and Perduco

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1 1.5 2

Chart 1.14 Difference between 3-month money market rate and expected key rates.¹⁾Percentage points. 2008 Q1 – 2015 Q4

Premium MPR 1/12 Premium MPR 2/12

0 0.5

2008 2009 2010 2011 2012 2013 2014 2015

1) Norges Bank's projections from 2012 Q2 Sources: Thomson Reuters and Norges Bank

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100 150 200 250

4 6 8 10 12

Chart 1.15 Household debt burden¹⁾ and interest burden²⁾.

Percent. Quarterly figures. 1988 Q1 – 2015 Q4

0 50

0 2

1988 1992 1996 2000 2004 2008 2012

Interest burden (left-hand scale) Debt burden (right-hand scale)

1) Loan debt as a percentage of disposable income adjusted for estimated reinvested dividends for 2000 – 2005 and redemption/reduction of equity capital for 2006 – 2015 2) Interest expenses after tax as a percentage of disposable income adjusted for estimated reinvested dividends for 2000 – 2005 and redemption/reduction of equity capital for

2006 – 2015 plus interest expenses

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3 4 5 6 7

Chart 1.16a Projected key policy rate in the baseline scenario with probability distribution. Percent. 2008 Q1– 2015 Q4

30% 50% 70% 90%

0 1 2

2008 2009 2010 2011 2012 2013 2014 2015

Source: Norges Bank

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1 0 1 2 3 4 5

Chart 1.16b Projected output gap¹⁾ in the baseline scenario with probability distribution. Percent. 2008 Q1 – 2015 Q4

30% 50% 70% 90%

-4 -3 -2 -1

2008 2009 2010 2011 2012 2013 2014 2015

1) The output gap measures the percentage deviation between mainland GDP and projected potential mainland GDP

Source: Norges Bank

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1 2 3 4 5

Chart 1.16c Projected CPI in the baseline scenario with probability distribution. Four-quarter change. Percent. 2008 Q1 – 2015 Q4

30% 50% 70% 90%

-1 0 1

2008 2009 2010 2011 2012 2013 2014 2015

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1 2 3 4 5

Chart 1.16d Projected CPIXE¹⁾ in the baseline scenario with probability distribution. Four-quarter change. Percent. 2008 Q1 – 2015 Q4

30% 50% 70% 90%

-1 0 1

2008 2009 2010 2011 2012 2013 2014 2015

1) CPI adjusted for tax changes and excluding temporary changes in energy prices. As from August 2008, the CPIXE is a real-time series. See Norges Bank Staff Memo

7/2008 and 3/2009 Source: Norges Bank

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3 4 5 6 7 8

Chart 1.17 Interval for the key policy rate at the end of each strategy period, actual developments and projected key policy rate in the baseline scenario.

Percent. January 2008 – December 2015

MPR 3/11 MPR 1/12 MPR 2/12 3/071/082/08

3/08

17 Dec 08

1/10 2/103/101/112/11 3/11

0 1 2

2008 2009 2010 2011 2012 2013 2014 2015

Source: Norges Bank

1/092/09

3/09 2/10 /

1/12 2/12

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0 1 2 3 4 5 85

88 91 94 97 100

Chart 1.18 Three-month money market rate differential between Norway¹⁾ and trading partners and the import-weighted exchange rate index (I-44)²⁾.

January 2003 – December 2015³⁾

-2 -1 0 100

103 106

2003 2005 2007 2009 2011 2013 2015

I-44 (left-hand scale)

3-month rate differential (right-hand scale)

1) Key policy rate in the baseline scenario plus premiums in the Norwegian money market. The calculations are based on the assumption that announced interest rate changes are priced into the money market

2) A positive slope denotes a stronger krone exchange rate

3) Monthly figures from January 2003 and Norges Bank projections from 2012 Q2 Sources: Thomson Reuters and Norges Bank

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2 3 4 5 6

-1 0 1 2 3 4

Chart 1.19 Projected inflation¹⁾and output gap in the baseline scenario.

Percent. 2008 Q1 – 2015 Q4

Output gap (left-hand scale) CPIXE (right-hand scale)

-1 0 1

-4 -3 -2

2008 2009 2010 2011 2012 2013 2014 2015

1) CPIXE: CPI adjusted for tax changes and excluding temporary changes in energy prices.

As from August 2008, the CPIXE is a real-time series. See Norges Bank Staff Memo 7/2008 and 3/2009

Source: Norges Bank

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-10 0 10 20 30 40

Chart 1.20 Consumer confidence.

Seasonally adjusted net figures. 2000 Q1 - 2012 Q2

-40 -30 -20

2000 2002 2004 2006 2008 2010 2012

1) For the euro area 2012 Q2 is the average for April and May.

Sources: TNS Gallup and Thomson Reuters

Norway Euro area¹⁾

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45 50 55 60 65 70

Chart 1.21 Purchasing managers index (PMI) for manufacturing. Diffusion index around 50. Seasonally adjusted net figures. January 2005 - May 2012

30 35 40

2005 2006 2007 2008 2009 2010 2011 2012

Source: Thomson Reuters and Bloomberg

Norway Euro area

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3 4 5 6 7 8

Chart 1.22 Key policy rate in the baseline scenario and in the alternative scenarios. Percent. 2008 Q1 – 2015 Q4

Higher growth Lower growth Baseline scenario

0 1 2

2008 2009 2010 2011 2012 2013 2014 2015

Source: Norges Bank

30% 50% 70% 90%

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3 4 5 6 7 8

Chart 1.23a Key policy rate. Percent. 2008 Q1 – 2015 Q4

Criterion 1 Criteria 1&2 Criteria 1,2&3

0 1 2

2008 2009 2010 2011 2012 2013 2014 2015

Source: Norges Bank

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1 0 1 2 3 4 5

Chart 1.23b Output gap. Percent. 2008 Q1 – 2015 Q4

-4 -3 -2 -1

2008 2009 2010 2011 2012 2013 2014 2015

Source: Norges Bank

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1.5 2 2.5 3 3.5 4

Chart 1.23c CPIXE¹⁾. Four-quarter change. Percent. 2008 Q1 – 2015 Q4

0 0.5 1

2008 2009 2010 2011 2012 2013 2014 2015

1) CPI adjusted for tax changes and excluding temporary changes in energy prices.

As from August 2008, the CPIXE is a real-time series. See Norges Bank Staff Memo 7/2008 and 3/2009

Source: Norges Bank

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2 3 4 5 6 7 8

Chart 1.24 Key policy rate and calculations based on simple monetary policy rules.¹⁾ Percent. 2008 Q1 – 2013 Q1

Taylor rule Growth rule

Rule with foreign interest rates

Key policy rate in the baseline scenario Model-robust interest rate rule

0 1 2

2008 2009 2010 2011 2012 2013

1) The calculations are based on Norges Bank’s projections for the output gap, growth gap, consumer prices and 3-month money market rates among trading partners. To ensure comparability with the key policy rate, the simple rules are adjusted for risk premiums in 3-month money market rates

Source: Norges Bank

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3 4 5 6 7 8

Chart 1.25 Three-month money market rates in the baseline scenario¹⁾ and estimated forward rates²⁾. Percent. 2008 Q1 – 2015 Q4

Estimated forward rates

Money market rates in the baseline scenario

0 1 2

2008 2009 2010 2011 2012 2013 2014 2015

1) Key policy rate in the baseline scenario plus premiums in the Norwegian money market. The calculations are based on the assumption that announced interest rate changes are priced into the money market.

2) Forward rates are based on money market rates and interest rate swaps. The blue band shows the highest and lowest forward rates in the period 4 June – 15 June 2012

Sources: Thomson Reuters and Norges Bank

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3 4 5 6 7 8

Chart 1.26 Key policy rate and interest rate developments that follow from Norges Bank’s average pattern of interest rate setting.¹⁾

Percent. 2004 Q1 – 2013 Q1

90% confidence interval

Key policy rate in baseline scenario

0 1 2

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

1) Interest rate movements are explained by developments in inflation, mainland GDP growth, wage growth and 3-month money market rates among trading partners. The equation is estimated over the period 1999 Q1 – 2012 Q1. See Staff Memo 3/2008 for further discussion Source: Norges Bank

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3 4 5 6 7 8 9

Chart 1 Key policy rate in the baseline scenario in MPR 1/12 with probability distribution and key policy rate in the baseline scenario in MPR 2/12 (red line).

Percent. 2008 Q1 – 2015 Q4

30% 50% 70% 90%

0 1 2 3

2008 2009 2010 2011 2012 2013 2014 2015

Source: Norges Bank

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0 1 2

0 1 2 Chart 2 Factors behind changes in the interest rate forecast since MPR 1/12.

Accumulated contribution. Percentage points. 2012 Q3 – 2015 Q4

Prices and costs Capacity utilisation

Exchange rate Interest rates abroad

Money market premiums Growth abroad

Change in the interest rate forecast

-2 -1

2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 -2 -1

Source: Norges Bank

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-1 0 1 2 3

Chart 2.1 Quarterly GDP growth. Percent. 2006 Q1 – 2012 Q1

-3 -2 1

2006 2007 2008 2009 2010 2011 2012

Global

Norway's main trading partners

Sources: IMF, Thomson Reuters and Norges Bank

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50 60 70

50 60

70 US Euro area Sweden

China UK

Chart 2.2 Manufacturing PMIs. Diffusion index centred around 50.

January 2006 – May 2012

30 40

2006 2007 2008 2009 2010 2011 2012

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2 3 4 5 6 7 8

Italy Spain

Chart 2.3 Yield spreads against German 2-year government bonds. Percentage points. 1 January 2008 – 15 June 2012

2008 2009 2010 2011 2012

-1 0 1

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0 20 40 60 80 100

0 20 40 60 80

100 US

Euro area

Emerging markets To enterprises To households

Chart 2.4 Bank lending conditions. Net balance¹⁾.

2006 Q1 – 2012 Q1

2006 2007 2008 2009 2010 2011 2012

-60 -40 -20

1) Values above 0 indicate tighter lending conditions

Sources: Thomson Reuters, Institute of International Finance and Norges Bank

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140 142 144 146 148

6 7 8 9 10 11 12

Unemployment rate (left-hand scale) Employment (right-hand scale)

Chart 2.5 US labour market. Unemployment as a percentage of labour force and employment in millions. Seasonally adjusted.

January 2006 – May 2011

136 138 140

2 3 4 5

2006 2007 2008 2009 2010 2011 2012

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2 4 6 8 10

2 4 6 8

10 Advanced economies

Emerging market economies Headline

Core inflation

Chart 2.6 Consumer prices in advanced economies and emerging markets.¹⁾

12-month change. Percent. January 2006 – April 2012

2006 2007 2008 2009 2010 2011 2012

-2 0 2

1) GDP-weighted (PPP). Advanced economies: Australia, Canada, euro area, Japan, UK and US. Emerging markets: Argentina, Brazil, India, Indonesia, China, Mexico, Russia, South Africa, South Korea and Turkey. Sources: CEIC, IMF, Thomson Reuters and Norges Bank

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0 2 4 6 8

0 2 4 6

8 US

Euro area Sweden UK

Chart 2.7 Unit labour costs. Total economy. Four-quarter change. Percent.

2006 Q1 – 2012 Q1

-4 -2 0

2006 2007 2008 2009 2010 2011 2012

Source: OECD

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60 80 100 120 140 160

Chart 2.8 Oil price (Brent Blend) and prices for Norwegian petroleum exports¹⁾.

USD/barrel. January 2000 – December 2015

Oil price Futures

Futures as at MPR 1/12 Petroleum price

0 20 40

2000 2002 2004 2006 2008 2010 2012 2014

1) Weighted average of Norwegian crude oil and gas exports Sources: Statistics Norway,Thomson Reuters and Norges Bank

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10 15 20 25

Chart 2.9 Prices for coal, crude oil and natural gas. USD per MMBTU.

January 2003 – April 2015

Coal US¹⁾

Oil¹⁾

Gas UK¹⁾

Gas US¹⁾

Gas Russia Gas Norway Futures prices

0 5

2003 2005 2007 2009 2011 2013 2015

1) For June 2012, calculated as daily average

Sources: IMF, Thomson Reuters, Statistics Norway and Norges Bank

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300 400 500 600 700

Aluminium Copper Wheat Cotton

Chart 2.10 Commodity prices. USD. Index, January 2003 = 100.

January 2003 – December 2015

Futures prices

0 100 200

2003 2005 2007 2009 2011 2013 2015

Sources: CME Group and Thomson Reuters

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1 2 3 4

CPI CPI-ATE CPIXE

Chart 2.11 CPI, CPI-ATE¹⁾and CPIXE²⁾. 12-month change. Percent.

January 2009 – December 2012³⁾

0 0

2009 2010 2011 2012

2) CPI adjusted for tax changes and excluding temporary changes in energy prices.

Real-time figures. See Norges Bank Staff Memo7/2008 and 3/2009

3) Projections for June 2012 – December 2012 (broken lines). Monthly figures to September 2012, then quarterly figures

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0 2.5 5

Chart 2.12 CPI-ATE¹⁾. Total and by supplier sector.

12-month change. Percent. January 2009 – December 2012²

CPI-ATE Imported consumer goods Domestically produced goods and services³⁾

-2.5 -2.5

2009 2010 2011 2012

2) Projections for June 2012 – December 2012 (broken lines). Monthly figures to September 2012, then quarterly figures

3) Norges Bank's estimates

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-0.5 0 0.5 1

Chart 2.13 Indicator of external price impulses to imported consumer goods measured in foreign currency. Annual change. Percent. 2002 – 2012¹⁾

-1.5 -1

2002 2004 2006 2008 2010 2012

1) Projections for 2012 Source: Norges Bank

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1 2 3

MPR 2/12 SAM CPI-ATE

Chart 2.14 CPI-ATE¹⁾. Actual figures, baseline scenario and projections from SAM²⁾with fan chart. Four-quarter change. Percent. 2011 Q1 – 2012 Q4³⁾

30% 50% 70% 90%

0 0

Mar-11 Sep-11 Mar-12 Sep-12

1) CPI adjusted for tax changes and excluding energy products 2) System for averaging models

3) Projections for 2012 Q2 – 2012 Q4 (broken lines) Sources: Statistics Norway and Norges Bank

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0 2 4

Regional network Mainland GDP growth

Chart 2.15 GDP mainland Norway¹⁾and Norges Bank's regional network's indicator of change in production past three months and expected change in production next six months. Percent. 2003 Q1 – 2012 Q4²⁾

-2 -2

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1) Seasonally adjusted quarterly change. Volume

2) Latest observation in the regional network is May 2012. Latest GDP observation is 2012 Q1, projections for 2012 Q2 – 2012 Q4 (broken line)

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120 130 140 150 160

Mainland Norway Total

Chart 2.16 Terms of trade. Index. 2003 Q1 = 100.

2003 Q1 – 2012 Q1

90 100 110

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

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2 3 4 5 6 7

MPR 2/12 SAM

Mainland GDP

Chart 2.17 GDP mainland Norway. Actual figures, baseline scenario and projections from SAM¹⁾ with fan chart. Four-quarter change. Volume.

Seasonally adjusted. Percent. 2010 Q1 – 2012 Q4²⁾

30% 50% 70% 90%

0 1 0

1

Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12

1) System for averaging models

2) Projections for 2012 Q2 – 2012 Q4 (broken lines) Sources: Statistics Norway and Norges Bank

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2500 2600 2700 2800

Actual labour force, trend

Labour force with participation rates at 2006-levels Labour force with participation rates at 2007-levels

Chart 2.18 Actual labour force trend and the labour force following demographical changes¹⁾. Seasonally adjusted figures. In 1000s.

January 2006 – December 2012²⁾

2400 2500

2006 2007 2008 2009 2010 2011 2012

1) The labour force based on constant participation rates at 2006/2007-levels

2) Latest observation is March 2012, projections for April 2012 –December 2012 (broken lines) Sources: Statistics Norway and Norges Bank

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30 40 50 60 70 80

0 1 2 3 4

5 Output gap MPR 2/12 (left-hand scale)

Capacity constraints (right-hand scale) Labour supply (right-hand scale)

Chart 2.19 Capacity constraints and labour supply¹⁾reported by the regional network and estimated output gap. Percent. 2005 Q1 – 2012 Q2

10 20 -2

-1

2005 2006 2007 2008 2009 2010 2011 2012

1) Share of contacts that will have some or considerable problems accommodating an increase in demand and the share of contacts where production is constrained by labour supply

Source: Norges Bank

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-1 0 1 2 3 4 5

Domestically oriented manufacturing Suppliers to the petroleum industry

Chart 2.20 Change in production past three months and expected change in production next six months. Index¹⁾. February 2003 – November 2012²⁾

-3 -2

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -3

-2 Export industry

Construction

1) The scale runs from -5 to +5, where -5 denotes a sharp fall and +5 denotes strong growth.

See article "Norges Bank's regional network: fresh and useful information" in Economic Bulletin2/2009 for further information

2) Latest observation in the regional network is May 2012 Source: Norges Bank

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110 115 120 125 130

Chart 2.21 Index of household consumption of goods. Seasonally adjusted volume index. 2005 = 100. January 2008 – April 2012

100 105 110

2008 2009 2010 2011 2012

Source: Statistics Norway

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5 0 5 10 15

5 0 5 10

15 Saving ratio excl. dividend income Saving ratio, adjusted ²⁾

Net lending ratio excl. dividend income

Chart 2.22 Household saving and net lending as a share of disposable income. Percent. 1992 – 2015¹⁾

-15 -10 -5

1992 1996 2000 2004 2008 2012

-15 -10 -5

1) Projections for 2012 – 2015 (broken lines)

2) Adjusted for estimated reinvested dividend income for 2000 – 2005 and redemption/reduction of equity capital for 2006 – 2015

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4 6 8

Household consumption Household real disposable income

Chart 2.23 Household consumption¹⁾and real disposable income²⁾. Annual change. Percent. 2003 – 2015³⁾

0 2

2003 2005 2007 2009 2011 2013 2015

0 2

1) Includes consumption among non-profit organisations. Volume

2) Excluding dividend income. Including income in non-profit organisations 3) Projections for 2012 – 2015 (broken line)

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30000 40000 50000 60000 70000 80000

-5000 0 5000 10000 15000 20000

Difference between number of housing completions and increase in households (left-hand scale)

Population growth (right-hand scale)

Chart 2.24 Difference between number of housing completions and increase in households, and population growth. 2002 – 2012¹⁾

2002 2004 2006 2008 2010 2012

0 10000 20000

-20000 -15000 -10000

1) Projections for 2011 and 2012

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150 200 250 300 350

Business Housing

Chart 2.25 Investment in mainland Norway excluding public sector.

Constant 2009 prices. In billions of NOK. 1992 – 2012¹⁾

0 50 100

1992 1997 2002 2007 2012

1) Projections for 2012

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-1 0 1 2

Regional network Employment growth

Chart 2.26 Employment¹⁾and Norges Bank's regional network's indicator of change in employment and expected change in employment next three months. Percent. 2003 Q1 – 2012 Q4²⁾

-2 1

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1) Seasonally adjusted quarterly change in Quarterly National Accounts 2) Latest observation in the regional network is May 2012.

Latest observation in the Quarterly National Accounts is 2012 Q1, projections for 2012 Q2 – 2012 Q4 (broken line)

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2 3 4 5

Chart 2.27 Registered unemployment. Percentage of labour force.

Seasonally adjusted. 2003 Q1 – 2012 Q4¹⁾

0 1

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1) Projections for 2012 Q2 – 2012 Q4 (broken line)

Sources: Norwegian Labour and Welfare Service, Statistics Norway and Norges Bank

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2 3 4 5 6 7

2 3 4 5 6

7 Regional network November (previous year) Regional network January

Regional network May Regional network September

Regional network November Annual wage growth

Chart 2.28 Annual wage growth and estimated wage growth from Norges Bank's regional network. Percent. 2002 – 2012

0 1 0

1

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Sources: Norges Bank and the Norwegian Technical Calculation Committee for Wage Settlements (TBU)

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55 60 65 70

Chart 2.29 General government expenditure as share of GDP mainland Norway. 1985 – 2012¹⁾

45 50

1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

1) Projection for 2012

Source: Ministry of Finance

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60 90 120 150 180

Chart 2.30 Structural non-oil deficit and expected real return on the Government Pension Fund Global. Constant 2012 prices.

In billions of NOK. 2001 – 2015¹⁾

Structural, non-oil deficit Expected real return

0 30 60

2001 2003 2005 2007 2009 2011 2013 2015

1) Projections for 2012 – 2015

Sources: Ministry of Finance and Norges Bank

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75 100 125 150 175 200

Chart 2.31 Petroleum investment. Constant 2009 prices. In billions of NOK.

1992 – 2015¹⁾

0 25 50

1992 1995 1998 2001 2004 2007 2010 2013

1) Projections for 2012 – 2015