THE EXECUTIVE BOARD
16 MARCH 2016
Market developments
2
Selected equity price indices
1 Jan. 2015=100. 1 January 15 – 14 March 16
Prices in credit default market, European banking sector CDS indices. Basis points. 1 January 15 – 14 March 16
Source: Bloomberg
0 50 100 150 200 250 300 350
0 50 100 150 200 250 300 350
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Senior bank bonds
Subordinated debt
0 20 40 60 80 100 120 140 160 180
0 20 40 60 80 100 120 140 160 180
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 US
Europe
Emerging economies China
GDP growth for trading partners
3
Volume. Four-quarter change. Percent. Export weights. 2010 Q1– 2019 Q4
0.5 1 1.5 2 2.5 3 3.5 4 4.5
0.5 1 1.5 2 2.5 3 3.5 4 4.5
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Projections MPR 1/16
Projections MPR 4/15
Sources: Thomson Reuters and Norges Bank
Consumer prices, trading partners
4
Twelve-month change. Percent. January 2005 – February 2016
1)-4 -2 0 2 4 6 8
-4 -2 0 2 4 6 8
2005 2007 2009 2011 2013 2015
Euro area UK Sweden US
1) The latest observation is February 2016 for the euro area and Sweden, and January 2016 for the UK and the US.
Source: Thomson Reuters
5
-1 0 1 2 3
-1 0 1 2 3
2012 2013 2014 2015 2016 2017 2018 2019
US
Euro area UK
Sweden
14 March 2016 11 December 2015
Actual and expected key rates
Percent. January 2012 – December 2019
1) Broken lines show estimated forward rates at 11 December 2015. Solid lines show forward rates at 14 March 2016.
Forward rates are based on Overnight Index Swap (OIS) rates.
Sources: Bloomberg, Thomson Reuters and Norges Bank
Money market rates for trading partners 1)
6
Percent. 2010 Q1 – 2019 Q4
0 0.5 1 1.5 2
0 0.5 1 1.5 2
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 14 March 2016
MPR 4/15
1) Blue and orange broken lines show forward rates for 14 March 2016 and 11 December 2015.
Sources: Thomson Reuters and Norges Bank
Three-month Nibor spread
7
Pecentage points. 1 January 2014 – 31 December 2019
2)1) Norges Banks estimates of the difference between three-month Nibor and expected key policy rate.
Sources: Thomson Reuters and Norges Bank
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8
2014 2015 2016 2017 2018 2019
Three-month Nibor spread MPR 1/16
MPR 4/15
Oil prices
8
USD/barrel. 1 January 2010 – 31 December 2019
0 20 40 60 80 100 120 140 160
0 20 40 60 80 100 120 140 160
2010 2012 2014 2016 2018
Oil price
Oil futures prices 14 March 2016 Oil futures prices 11 December 2015
Sources: Thomson Reuters and Norges Bank
Import-weighted exchange rate index (I-44)
9
1 June 2014 – 31 December 2016
84 88 92 96 100 104 108 112
84 88 92 96 100 104 108 112
Jun-14 Dec-14 Jun-15 Dec-15
1) A positive slope denotes a weaker krone exchange rate.
Source: Norges Bank 9
Projections MPR 4/15
GDP mainland Norway
10
Four-quarter change. Percent. 2011 Q1 – 2016 Q2
Sources: Statistics Norway and Norges Bank
0 1 2 3 4
0 1 2 3 4
2011 2012 2013 2014 2015 2016
Regional network SAM MPR 1/16
GDP mainland Norway
Expected output growth next six months, Norges Bank’s regional network 1)
11
Annualised. Percent
-6 -5 -4 -3 -2 -1 0 1 2 3
-6 -5 -4 -3 -2 -1 0 1 2 3
August 2015 October 2015 February 2016
Construc- tion
Export industry
Domest.
oriented mfg.
Oil serv.
export market
Oil serv.
domest.
market
Househ.
services
Commerc.
services
Retail trade
1)The network uses an index from −5 til +5, where −5 indicates that production is expected to decline by 10% or more annualised. Several oil service enterprises expect production to decline by more than 10% in the next six months. This is not reflected in the chart due to the limitations of the index.
Source: Norges Bank
Petroleum investment
12
Volume. Annual change. Percent. 2011 – 2019
-20 -15 -10 -5 0 5 10 15 20
-20 -15 -10 -5 0 5 10 15 20
2011 2013 2015 2017 2019
MPR 4/15 MPR 1/16
Sources: Statistics Norway and Norges Bank
House prices in the largest cities
13
Twelve-month change. January 2010 – February 2016
-10 -5 0 5 10 15 20
-10 -5 0 5 10 15 20
2010 2011 2012 2013 2014 2015 2016
Oslo Bergen
Trondheim Stavanger Tromsø Kristiansand Drammen
Sources: Eiendom Norge, FINN and Eiendomsverdi
Credit from selected funding sources to Norwegian non-financial enterprises
14
Twelve-month change. January 2011 – January 2016
-10 0 10 20 30
-10 0 10 20 30
2011 2012 2013 2014 2015 2016
Domestic notes and bonds
Foreign credit (mainland enterprises) Domestic credit from banks and mortgage companies
Sources: Statistics Norway and Norges Bank
Unemployment rate
15
As percentage of the labour force. January 2006 – June 2016
0 1 2 3 4 5
0 1 2 3 4 5
2006 2008 2010 2012 2014 2016
LFS NAV
Sources: Statistics Norway, NAV and Norges Bank
Wage growth in 2016
16
Nominal wage growth. Percent
2.4 2.3
2.6
2.8
2.6
0 1 2 3
0 1 2 3
Managers Employers Employees MPR 4/15 MPR 1/16
Regional network
Expectations survey Projections
Sources: Epinion and Norges Bank
CPI-ATE. Total and by supplier sector
17
Twelve-month change. Percent. January 2014 – June 2016
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
Jan-14 Jul-14 Jan-15 Jul-15 Jan-16
CPI-ATE
Imported consumer goods
Domestically produced goods and services Projections MPR 1/16
Sources: Statistics Norway and Norges Bank
Expected consumer price inflation 2 and 5 years ahead 1)
18
Percent. 2002 Q1 – 2016 Q1
0 1 2 3 4 5 6
0 1 2 3 4 5 6
2002 2005 2008 2011 2014
Expected inflation 2 years ahead Expected inflation 5 years ahead
1) Average of expectations of employer/employee organisations and economists in the financial industry and academia.
Sources: Epinion, Opinion, TNS Gallup and Norges Bank
Factors behind changes in the interest rate forecast since MPR 4/15
19
Cumulative contribution. Percentage points. 2016 Q2 – 2018 Q4
-1.5 -1 -0.5 0 0.5 1 1.5
-1.5 -1 -0.5 0 0.5 1 1.5
2016Q2 2016Q4 2017Q2 2017Q4 2018Q2 2018Q4
Exchange rate Foreign demand
Foreign interest rates Money market premium Domestic demand Wages and prices
Change in interest rate forecast
Source: Norges Bank
Baseline projections in Monetary Policy Report 1/16
Sources: Statistics Norway and Norges Bank 20
Output gap Key policy rate
CPI-ATE Exchange rate (I-44)
0 1 2 3
0 1 2 3
2010 2012 2014 2016 2018
MPR 1/16 MPR 4/15
-3 -2 -1 0 1 2
-3 -2 -1 0 1 2
2010 2012 2014 2016 2018
0 1 2 3 4
0 1 2 3 4
2010 2012 2014 2016 2018
85 90 95 100 105 110
85 90 95 100 105 110
2010 2012 2014 2016 2018
Private investment Mainland exports
Projections for key economic aggregates
Sources: Statistics Norway and Norges Bank 21
Private consumption and disposable real income GDP mainland Norway
0 1 2 3 4 5
0 1 2 3 4 5
2010 2012 2014 2016 2018
0 1 2 3 4 5
0 1 2 3 4 5
2010 2012 2014 2016 2018
Disposable real income MPR 1/16
0 2 4 6 8 10
0 2 4 6 8 10
2010 2012 2014 2016 2018
-10 -5 0 5 10 15
-10 -5 0 5 10 15
2010 2012 2014 2016 2018
