Chart1 MainlandGDP ChartsAddressby GovernorSvein Gjedremat themeetingoftheSupervisoryCouncilofNorges Bank onThursday, 15 February2007 Economicperspectives

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Economic perspectives

Charts

Address by Governor Svein Gjedrem at the meeting of the Supervisory Council of Norges

Bank on Thursday, 15 February 2007

Norges Bank

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Chart 1 Mainland GDP

Annual growth. Per cent

-2 0 2 4 6

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 -2 0 2 4 6

Sources: Statistics Norway and Norges Bank

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50 100 150 200

1830 1850 1870 1890 1910 1930 1950 1970 1990 50 100 150 200

Chart 2 Terms of trade

Index. 2000=100

Norges Bank

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Chart 3 Foreign workers on assignments in Norway

0 10 000 20 000 30 000 40 000 50 000 60 000

2003 2004 2005 2006

0 10 000 20 000 30 000 40 000 50 000 60 000

New EU countries EU15 excl. Nordic countries Nordic countries

Source: Central Office - Foreign Tax Affairs

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Chart 4 Productivity growth in the business sector

Per cent

-1 0 1 2 3 4 5 6

1980 1985 1990 1995 2000 2005

-1 0 1 2 3 4 5 6

Norges Bank

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Chart 5 Short-term real interest rate

Per cent

0 1 2 3 4 5 6 7

1996 1998 2000 2002 2004 2006

0 1 2 3 4 5 6 7

Interval for neutral real interest rate

Source: Norges Bank

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Chart 6 Capacity utilisation in manufacturing

Per cent

70 75 80 85 90

1983 1987 1991 1995 1999 2003

70 75 80 85 90

Source: Statistics Norway Average

2006

Norges Bank

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-2 -1 0 1 2 3 4

2001 2002 2003 2004 2005 2006 2007 2008 2009 -2 -1 0 1 2 3 4

Chart 7 Inflation and capacity utilisation

Per cent

Inflation

Capacity utilisation

Projections

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0 1 2 3 4 5 6

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 0 1 2 3 4 5 6

Chart 8 Registered unemployment

Per cent

Source: Norwegian Labour and Welfare Organisation (NAV)

Norges Bank

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Chart 9 Norges Bank's key rate

¹⁾

Per cent

0 1 2 3 4 5 6 7 8

2001 2002 2003 2004 2005 2006 2007 2008 2009 0 1 2 3 4 5 6 7 8

Source: Norges Bank

1)Projections from Inflation Report 3/06

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Chart 10 Inflation

Moving 10-year average. Per cent

0 2 4 6 8 10 12 14

1980 1985 1990 1995 2000 2005

0 2 4 6 8 10 12 14

Inflation target

Norges Bank

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Chart 11 Periods of rising house prices

Number of years and total percentage increase. 1819-2006

0 50 100 150 200

1865-1878 1890-1898 1922-1933 1955-1972 1977-1987 1993-2006

11 years

14 years

9 years 12 years 18 years

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Chart 12 Total increase in real house prices

At end-2005. Per cent

0 50 100 150 200 250 300

Ireland Netherlands Norway UK Denmark Spain Sweden France New Zealand US Italy Canada Finland

Sources: Paul van den Noord (2006) OECD, Statistics Norway and Norges Bank

Norges Bank

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Chart 13 House prices and disposable income

Annual change. Average 1999 -2005

-5 0 5 10 15

0 1 2 3 4

-5 0 5 10 15

Real disposable income

Real houseprices

Germany

UK

US France

Spain

Norway

Japan

Sweden Australia

Sources: OECD, Reuters EcoWin, Statistics Norway and Norges Bank

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-15 -10 -5 0 5 10

1980 1985 1990 1995 2000 2005

-15 -10 -5 0 5 10

Saving

Net lending

Chart 14 Household saving and net lending

Percentage of disposable income

Norges Bank

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0 2 4 6 8 10 12

1991 1993 1995 1997 1999 2001 2003 2005 2007 0 2 4 6 8 10 12

Chart 15 Long-term interest rates

Per cent

Source: Reuters EcoWin US

Norway

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Chart 16 Population structure

0 10,000 20,000 30,000 40,000

2000 2002 2004 2006

75 76 77 78 79

2000 2002 2004 2006

Number of households

Growth

Numbers in densely populated areas

Per cent of total population

Norges Bank

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Chart 17 Household debt

Percentage of disposable income

0 50 100 150 200 250

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 0 50 100 150 200 250

Sources: OECD, Office for National Statistics (ONS), Sveriges Riksbank, Danmarks Nationalbank, BIS and Norges Bank

Norway

Denmark Netherlands

UK

Sweden

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Chart 18 House prices in Norway

Real rise and fluctuations. Per cent

0 2 4 6 8 10

1944-2006 1993-2006

0 2 4 6 8 10

Real rise Fluctuations

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Norges Bank

13 15 17 19 21 23 25

2003 2004 2005 2006

13 15 17 19 21 23 25

Chart 19 Actual and simulated house price

In thousands of NOK per square meter

Actual house price

Simulated house price

Sources: Norges Eiendomsmeglerforbund, Eiendomsmeglerforetakenes forening, FINN.no, ECON og Norges Bank

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-60 -50 -40 -30 -20 -10 0

1879-1880 1899-1905 1915-1921 1934-1944 1973-1976 1988-1992

Chart 20 Periods of falling house prices

Number of years and total percentage decline. 1819-2006

Sources: Statistics Norway and Norges Bank 7 years

4 years

2 years 7 years 5 years

11 years

Norges Bank

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0 1 2 3 4

1975-1994 1995-2005

0 1 2 3 4 Nordic countries EU15 excl. Nordic countries US

Chart 21 GDP

Average growth. Per cent

Sources: Groningen Growth and Development Centre and Norges Bank

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Chart 22 Productivity growth

Per cent

0 1 2 3 4 5

1970 1980 1990 2000

Services and retail trade

Sources: OECD, Groningen Growth and Development Centre, Statistics Norway and Norges Bank Mainland Norway, total

0 1 2 3 4 5

Finland Norway SwedenDenmark EU15 excl.

Nordic countries

Norway Nordic countries and EU15

Average 1995 -2005

Total

Norges Bank

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0 5 10 15

1970 1980 1990 2000

0 5 10 15

1970 1980 1990 2000

Nordic countries EU15

Inflation Unemployment

Sources: Reuters EcoWin, OECD and Norges Bank

Chart 23 Inflation and unemployment

Per cent

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Changes in the economic system

1. Division of responsibility in economic policy 2. Trade policy

3. Tax system

3. Financial and credit markets

Norges Bank

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Employment and growth

Wage formation, structures and incentives

Krone exchange rate Fiscal policy

Price stability Monetary policy

1. Division of responsibility in economic policy

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Chart 24 Start ups in the service sector

Per cent of existing enterprises. Average 1998 -2001

0 5 10 15

Sweden Finland Belgium Italy Netherlands Denmark Norway UK

Source: Eurostat

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Norges Bank

0 20 40 60 80 100

1972 1976 1980 1984 1988 1992 1996 2000 2004 0 20 40 60 80 100

Norway

EU15

Sources: OECD and Norges Bank

Chart 25 Female labour force participation

Per cent

Nordic countries

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Chart 26 Persons on benefit and early retirement schemes

Number of persons. 1995 – 2005

0 100,000 200,000 300,000 400,000 500,000 600,000

1995 1997 1999 2001 2003 2005

0 100,000 200,000 300,000 400,000 500,000 600,000

Source: Norwegian Labour and Welfare Organisation (NAV) Sickness benefits

Early retirement schemes

Rehabilitation Vocational rehabilitation

Disability schemes

Norges Bank

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Chart 27 CO

₂

emissions

In billions of tonnes

0 2 4 6 8 10

1980 1984 1988 1992 1996 2000 2004

0 2 4 6 8 10

North America

Eurasia Asia and Oceania

Europe

Source: Energy Administration Information (EIA)

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Chart 28 Global mean temperature

Trend and deviation from average 1951 – 1980, ºC

-0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8

1880 1895 1910 1925 1940 1955 1970 1985 2000 -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8

Source: NASA – Goddard Institute for Space Studies