THE NORWEGIAN ECONOMY – MACROECONOMIC DEVELOPMENTS AND MONETARY POLICY
GOVERNOR ØYSTEIN OLSEN London, 6 April 2018
Economic growth following the financial crisis
80 90 100 110 120
-5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 GDP per capita. Index. Value in year recession started = 100
Number of years before and after recession
Previous recessions
Financial crisis, US
Financial crisis, euro area
2
Global real interest rates
Yield on 10-year government bonds adjusted for inflation. OECD. Percent
3
-1 0 1 2 3 4 5 6 7
1985 1990 1995 2000 2005 2010 2015
Sources: Thomson Reuters and Norges Bank
Inflation in Norway
-2 0 2 4 6 8 10 12 14 16
1972 1978 1984 1989 1995 2001 2006 2012 2018 Four-quarter change. Percent
Source: Statistics Norway
Five-year moving average Consumer price index Inflation target from 2001
4
House prices
80 100 120 140 160 180 200 220
2005 2007 2009 2011 2013 2015 2017
Nominal prices. Index. 2005=100
US, euro area and Japan Australia, Canada, New Zealand and Sweden Norway
Sources: Eiendomsverdi, Finn.no, Real Estate Norway, Thomson Reuters and Norges Bank 5
Exchange rate and oil prices
85 90 95 100 105 110 115 20
40 60 80 100 120
2014 2015 2016 2017 2018
Oil price (l.h.s.) I-44 (r.h.s.) USD per barrel (Brent Blend) and import-weighted exchange rate index1) at 3 April
1) A positive slope denotes a stronger krone exchange rate. 6
Sources: Thomson Reuters and Norges Bank
GDP for mainland Norway
0 1 2 3 4
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Annual change. Percent
Sources: Statistics Norway and Norges Bank 7
Inflation
0 1 2 3 4
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CPI CPI-ATE Inflation target
CPI and CPI- ATE. Four-quarter change. Percent
Sources: Statistics Norway and Norges Bank 8
The Executive Board’s assessment and interest rate forecast
The Executive Board decided to keep the key policy rate unchanged at 0.5%.
The Executive Board’s current
assessment of the outlook and balance of risks suggests that the key policy rate will most likely be raised after summer 2018.
9
0 1 2 3 4 5 6 7
2007 2010 2013 2016 2019 Key policy rate MPR 1/18
Source: Norges Bank
Factors behind changes in key policy rate forecast since MPR 4/17
-1 -0.5 0 0.5 1
Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20
Judgement
Change in inflation target Money market premium Prices and wages Foreign factors Exchange rate Domestic demand
Change in key policy rate forecast
Percentage points
Source: Norges Bank 10
THE NORWEGIAN ECONOMY – MACROECONOMIC DEVELOPMENTS AND MONETARY POLICY
GOVERNOR ØYSTEIN OLSEN London, 6 April 2018
