Executive Board meeting

(1)

Executive Board meeting

8 May 2013

(2)

2

-1 0 1 2 3 4 5 6

Emerging economies US Euro area

2013 2014

IMF: Three-speed recovery

GDP growth. Percent

Source: IMF

(3)

-5 0 5 10 15 20

2008 2010 2012

Asia

Industrial production Retail sales

3

Emerging economies

Retail sales and industrial production. 12-month change, 3-month moving average. Constant prices. January 2008 – February 2013

Sources: Thomson Reuters, IMF and Norges Bank

-15 -10 -5 0 5 10 15 20

- 15 - 10 - 5 0 5 10 15 20

2008 2010 2012

Latin America

Industrial production Retail sales

(4)

US

Employment: In millions of persons¹⁾

Retail sales: Deflated by the CPI

-15 -10 -5 0 5 10

120 125 130 135 140

2005 2007 2009 2011 2013

Employment (left-hand scale) Retail sales (right-hand scale)

Housing market

Index. 1 January =100

4

0 30 60 90 120 150 180

2001 2004 2007 2010 2013

Sales of existing homes

Sales of new homes Housing starts

Source: Thomson Reuters 1) Non-farm payroll

(5)

Euro area

Sources: IMF and Norges Bank

70 80 90 100 110

2005 2007 2009 2011 2013

Spain Ireland Italy Euro area Greece Portugal

GDP

Index. 2008 Q1 = 100.

2005 Q1 – 2012 Q4

¹⁾

Unemployment

Percent. January 2000 – March 2013

²⁾

2) Greece: to end-January 2013 1) Greece: not seasonally adjusted, four-quarter moving

average. Spain: to end-2013 Q1.

5

0 5 10 15 20 25 30

2000 2003 2006 2009 2012

Greece Spain Ireland Italy Portugal Euro area

(6)

6

Financial markets – main picture

0 2 4 6 8

Jan-10 Jan-11 Jan-12 Jan-13

UK US Germany

Spain Italy

Yields on 10-year government bonds

0 40 80 120 160

US Italy

Spain Europe

Europe finance

0 0.5 1 1.5 2

USD LIBOR EURIBOR STIBOR Kliem NIBOR

3-month money market premium

-150 -100 -50 0 50 100 150

US UK Euro area

Citigroup economic surprise indices

Source: Bloomberg Stock markets

(7)

Commodity prices, spot and futures prices

USD. Index, January 2007 = 100. January 2005 – December 2014

0 50 100 150 200 250 300

2005 2007 2009 2011 2013

Aluminium Copper Wheat Maize Oil price Futures prices MPR 1/13

Sources: Thomson Reuters, CME Group and ICE

 7

(8)

0 1 2 3

Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

US

Euro area³⁾ UK

Sweden

MPR 1/13 6 May 2013

Sources: Bloomberg and Norges Bank 1) Expected key rates based on Overnight Indexed Swap (OIS) rates

2) Daily data from 1 January 2010 and quarterly data from 2013 Q2 3) EONIA for the euro area

Expected key rates have fallen

Actual and expected key rates.

¹⁾

Percent.

January 2010 – December 2016

²⁾

 8

(9)

Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

80 85 90 95 100 105 110 80

85 90 95 100 105 110

I-44

Projections MPR 1/13

9

Import-weighted exchange rate

I-44

¹⁾

. January 2008 – June 2013

Source: Norges Bank 1) A positive slope denotes a stronger krone exchange rate

(10)

0 1 2 3 4 5 6

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13

Risk premium on 5-year covered bonds Money market premium

Key policy rate

Residential mortgage lending rate (credit lines)¹⁾

1) Home equity lines of credit provided by all banks and mortgage companies in Norway

10

Residential mortgage lending rates and interest margins

Percent. 4 January 2010 – 6 May 2013

Sources: DNB Markets, Statistics Norway and Norges Bank

(11)

0 1 2 3 4 5 6 7

Mar-11 Sep-11 Mar-12 Sep-12 Mar-13

GDP mainland Norway SAM (MPR 1/13)

SAM 8 May 2013

30% 50% 70% 90%

11

GDP mainland Norway approximately as expected

Four-quarter change. Volume. Seasonally adjusted. Percent.

2011 Q1 – 2013 Q2

Sources: Statistics Norway and Norges Bank

(12)

Regional network

Phone survey in April

-2 0 2 4

2003 2005 2007 2009 2011 2013

Regional network GDP growth mainland Norway

Output and mainland GDP

Percent. 2003 Q1– 2013 Q2

¹⁾

 Output increased somewhat less than firms envisaged in January

 Output growth is still expected to be slightly higher ahead

12 Sources: Statistics Norway and Norges Bank 1) Latest observation in the regional network is January 2013. Latest GDP

observation is 2012 Q4, projections for 2013 Q1 – 2013 Q2 (broken line)

(13)

Index of consumption of goods

Seasonally adjusted volume index. January 2007 – March 2013

13

100 105 110 115 120 125 130 135 140

Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

Source: Statistics Norway

(14)

House prices

12-month change and seasonally adjusted monthly change. Percent.

January 2004 – April 2013

-10 -5 0 5 10 15 20

-4 -3 -2 -1 0 1 2 3 4 5 6

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

12-month change (right-hand scale)

Monthly change (left-hand scale)

Source: Real estate industry (NEF, EFF, FINN.no and Pöyry) 14

(15)

Housing starts and other building starts

Seasonally adjusted. January 2009 – March 2013

100 150 200 250 300 350 400 450 500

2009 2010 2011 2012 2013

15

Housing. Area (1000 m

²

)

100 200 300 400 500 600 700

2009 2010 2011 2012 2013

Other buildings. Area (1000 m

²

)

Source: Statistics Norway

(16)

Labour force survey (LFS)

January 2007 – February 2013

LFS employment

In 1000s

2300 2400 2500 2600 2700

Jan-07 Jan-09 Jan-11 Jan-13

LFS unemployment

Percent

16 Source: Statistics Norway

1 2 3 4 5 6

Jan-07 Jan-09 Jan-11 Jan-13

(17)

17

Wage

carry-over Wage

increase Wage

drift Total Workers

LO/NHO ¹⁾ 1.2 0.4 1.8 3.4

Retail

trade 0.7 0.6 2.1 3.4

Public

sector 2.3 0.8 0.3 3.5

MPR 1/13 1.8 1.1 1.1 4.0

Preliminary wage settlements 2013

1) Norwegian Confederation of Trade Unions (LO)/

Confederation of Norwegian Enterprise (NHO)

(18)

-2.5 0 2.5 5

2009 2010 2011 2012 2013

CPI-ATE

Domestically produced goods and services Imported consumer goods

MPR 1/13

Inflation is low

CPI-ATE

¹⁾

total and by supplier sector. Percent.

January 2009 – March 2013

1) CPI adjusted for tax changes and excluding energy products Sources: Statistics Norway and Norges Bank 18

(19)

0 1 2 3 4 5 6 7

2008 2009 2010 2011 2012 2013 2014 2015 2016

30% 50% 70% 90%

19

Key policy rate in the baseline scenario

Projections from MPR 1/13. Percent. 2008 Q1 – 2016 Q4

Source: Norges Bank

(20)