Executive Board meeting
20 June 2012
-4 -2 0 2 4
-4 -2 0 2 4
2008 2009 2010 2011 2012 2013 2014 2015
Output gap
-1 0 1 2 3 4 5
-1 0 1 2 3 4 5
2008 2009 2010 2011 2012 2013 2014 2015
CPIXE
-1 0 1 2 3 4 5
-1 0 1 2 3 4 5
2008 2009 2010 2011 2012 2013 2014 2015
CPI
MPR 2/12 MPR 1/12
0 1 2 3 4 5 6 7
0 1 2 3 4 5 6 7
2008 2009 2010 2011 2012 2013 2014 2015
Key policy rate
Baseline scenarios with fan charts in MPR 2/12
Four quarter change. Percent. 2008 Q1 – 2015 Q4
30%
50%
70%
90%
Sources: Statistics Norway and Norges Bank
Key policy rate
Percent. January 2008 – December 2015
0 1 2 3 4 5 6 7 8
0 1 2 3 4 5 6 7 8
2008 2009 2010 2011 2012 2013 2014 2015
MPR 2/12 MPR 1/12 MPR 3/11
3/07
3/11
2/12 17. des. 08
2/09 1/09 2/08
3/09 1/10
2/10 3/10
Source: Norges Bank
1/08
3/08
1/11 2/11
1/12
Factors behind changes in the interest rate forecast
From MPR 1/12 to MPR 2/12. Accumulated contribution. Percentage points
-2 -1 0 1 2
2012 Q3 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 Q1 2015 Q3
-2 -1 0 1 2
Exchange rate Capacity utilisation
Growth abroad Money market premiums
Interest rates abroad Prices and costs Change in the interest rate forecast
Source: Norges Bank
Yields on 10-year government bonds. Percent
Sources: Bloomberg, Thomson Reuters and Norges Bank
Uncertainty in financial markets has increased
0 1 2 3 4
0 1 2 3 4
2008 2009 2010 2011 2012
Itraxx-stat Itraxx-finans Itraxx-foretak
0 1 2 3 4
0 1 2 3 4
2008 2009 2010 2011 2012
USD (LIBOR) EURIBOR NIBOR 0
1 2 3 4 5 6 7 8
0 1 2 3 4 5 6 7 8
2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 Spain
Italy Germany UK
CDS premius in Europe. Percent
Equity markets. Index. January 2007 = 100
40 50 60 70 80 90 100 110 120
40 50 60 70 80 90 100 110 120
2007 2008 2009 2010 2011 2012
US Europe Norway
3-month money market premiums. Percentage points
Projected GDP growth for 2012 and 2013
Annual change. Percent
-1 0 1 2 3 4 5 6 7 8
-1 0 1 2 3 4 5 6 7 8
Euro area US Emerging
markets
Trading partners
2012 2013
Sources: IMF, Thomson Reuters and Norges Bank
GDP contraction in the euro area
GDP growth in percent and PMI manufacturing
2007 2008 2009 2010 2011 2012
30 35 40 45 50 55 60 65
-3 -2 -1 0 1
2 GDP growth (to end-2012 Q1) (left-hand scale)
PMI manufacturing (to end-May 2012) (right-hand scale)
Sources: Thomson Reuters and Norges Bank
Key rate expectations have fallen
Actual and expected key rates
1). Percent
0 1 2 3 4 5 6
0 1 2 3 4 5 6
2008 2009 2010 2011 2012 2013 2014 2015
US
Euro area² ⁾ UK
MPR 1/12 18. juni
1) Based on Overnight Index Swap (OIS) rates. Daily figures from 1 January 2008 and quarterly figures from 2012 Q3 2) Interest rate on the main refinancing operations, EONIA rate forecast Sources: Bloomberg and Norges Bank
Oil price
USD/barrel
0 20 40 60 80 100 120 140 160
0 20 40 60 80 100 120 140 160
2000 2004 2008 2012
Oil price (Brent Blend) Futures
Futures as at MPR 1/12 Petroleum price
Commodity prices
Index. 1 January 2003 = 100
Sources: Thomson Reuters, Statistics Norway and Norges Bank
0 100 200 300 400 500 600 700
0 100 200 300 400 500 600 700
2003 2007 2011
Aluminium Copper Wheat Cotton
The exchange rate is fairly stable
Import-weighted exchange rate index (I-44)
1)84 86 88 90 92 94 84
86 88 90 92
94
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13
I-44
MPR 1/12 MPR 2/12
1) A positive slope denotes a stronger krone exchange rate
2000 2002 2004 2006 2008 2010 2012 80 85 90 95 100 105 110 80
85 90 95 100 105 110
Source: Norges Bank
0 1 2 3 4 5 6
0 1 2 3 4 5 6
Jun-09 Jun-10 Jun-11 Jun-12
Key policy rate Money market rate
Risk premium 5-year covered bond Bank lending rate (new residential mortgages)
0 1 2 3 4 5 6
0 1 2 3 4 5 6
Jun-09 Jun-10 Jun-11 Jun-12
Money market rate
Risk premium 5-year bank bond Key policy rate
Average corporate lending rate
Sources: DNB Markets, Norsk familieøkonomi, Statistics Norway and Norges Bank
Bank’s lending margins
Percent
Slightly higher activity in the Norwegian economy
Quarterly growth. Seasonally adjusted. Percent
-2 0 2 4
-2 0 2 4
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Norges Bank's regional network GDP growth mainland Norway 2/12 GDP growth mainland Norway 1/12
Projections MPR 2/12
Projections MPR 1/12 Market projections
Sources: Statistic Norway and Norges Bank
Registered unemployment
As a percentage of the labourforce. Seasonally adjusted.
1)0 1 2 3 4 5
0 1 2 3 4 5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
MPR 2/12 MPR 1/12
Sources: Norwegian Labour and Welfare Service, Statistics Norway and Norges Bank
1) Projections for 2012 Q2 – 2012 Q4 (broken line)
Household consumption and real disposable income
Annual growth. Percent
0 2 4 6 8
0 2 4 6 8
2003 2005 2007 2009 2011 2013 2015
Household consumption Projections MPR 1/12
Household real disposable income¹⁾
1) Excluding dividend income Sources: Statistic Norway and Norges Bank
International uncertainty affects the Norwegian economy
Consumer confidence 2000 Q1 –2012 Q2
1)-20 -10 0 10 20 30 40
-40 -30 -20 -10 0 10 20
2000 2004 2008 2012
Euro area Norway
Purchasing managers index for
manufacturing. Jan. 2005 – May 2012
30 35 40 45 50 55 60 65 70
30 35 40 45 50 55 60 65 70
2005 2007 2009 2011
Euro area Norway
1) For the euro area, 2012 Q2 is the average of April and May 2012 Sources: TNS Gallup, Bloomberg and Thomson Reuters
A manufacturing sector divided
Past 3 months and 6 months ahead. Annualised. Percent
-10 -8 -6 -4 -2 0 2 4 6 8 10
-10 -8 -6 -4 -2 0 2 4 6 8 10
2002 2004 2006 2008 2010 2012
Domestically oriented manufacturing Export industry
Suppliers to the petroleum industry Construction
Source: Norges Bank’s regional network
Growth in house prices and credit
12-month change. Percent
-10 -5 0 5 10 15 20
-10 -5 0 5 10 15 20
2004 2006 2008 2010 2012
Houseprices Credit
Sources: Statistics Norway, the real estate sector (NEF, EFF, Finn.no and ECON Pöyry) and Norges Bank
Consumer prices
12-month change. Percent. January 2009 – December 2012
1)0 1 2 3 4
0 1 2 3 4
2009 2010 2011 2012
CPI CPIXE CPI-ATE
1) Projections for June 2012 – December 2012 (broken lines).
Monthly figures up to September 2012, thereafter quarterly figures Sources: Statistic Norway and Norges Bank
Uncertainty
Key policy rate in the baseline scenario and in the alternative scenarios. Percent
0 1 2 3 4 5 6 7 8
0 1 2 3 4 5 6 7 8
2008 2009 2010 2011 2012 2013 2014 2015
Higher growth Lower growth Baseline scenario
Source: Norges Bank
