Chapter 1 International economy

Hovedstyret desember 2002

Chapter 1

International economy

60 70 80 90 100 110

jan 01 jul 01 jan 02 jul 02

60 70 80 90 100 110

1.1 Equity prices and long-term interest rates in the US, and

commodity prices.

Index, week 1 in 2001=100

Wilshire 5000 Commodities (industrials)

Source: Norges Bank and EcoWin / The Economist and Wilshire Associates Long-term rates

(10-year)

40 60 80 100 120

95 96 97 98 99 00 01 02

40 60 80 100 120

Week 1 in 1995=100

Hovedstyret desember 2002

1.2 Growth in GDP 2003

Estimates from Consensus Economics

-2 -1 0 1 2 3 4 5

North America Western Europe

Asia/Oceania Eastern Europe Latin America Total (70 countries) 2001 Estimates 2002 Feb. 02 Aug. 02 Oct. 02 Nov. 02

Source: Consensus Economics

1.3 GDP Growth in Europe in 2003

Estimates from Consensus Economics

0 1 2 3

Germany France UK Sweden Trading partners

2001 Estimates 2002 Feb-02 Aug-02 Oct-02 Nov-02

Source: Consensus Economics

Hovedstyret desember 2002

1.4 Industrial production

in the US, Japan and the euro area. Percentage change on 3 months earlier.

Seasonally adjusted. 3 3-month moving average. Volume

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

1996 1997 1998 1999 2000 2001 2002

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

Sources: EcoWin/ Federal Reserve, Ministry of International Trade and Ind and EUR-OP/EUROSTAT US

Japan Euro area

1.5 Producer and consumer prices 25 trading partners

Percentage change on same month previous year

-4 -2 0 2 4 6

1996 1997 1998 1999 2000 2001 2002

-4 -2 0 2 4 6

Sources: Datastream and Norges Bank

CPI

PPI

Hovedstyret desember 2002

1.6 Key rates and expected change in selected countries

Source: Reuters, Bloomberg and Norges Bank

1)Not adjusted for any term premium na na

None -1.00

0.25-1.25 Switzerland

3½ 2¾

None 0.50

2.75 Canada

4¾ 4½

None 0.50

4.75 Australia

na na

-0.50 -3.80

6.3 Iceland

4 3½

-0.50 0.00

3.75 Sweden

3 2¾

-0.50 -0.65

2.95 Denmark

4 ¼ 3¾

None 0.00

4.00 UK

2¾ 2½

-0.50 -0.50

2.75 Euro area

5¾ 0 1 ¼

Expected level in 3 mths 12 mths¹⁾

5¾ None

1.00 5.75

New Zealand

0 None

0.00 Approaching zero

Japan

2 -0.50

-0.50 1.25

US

Change since Executive Board meeting 30.10.02 Change

since 01.01.02 Key rate

Hovedstyret desember 2002

US

Hovedstyret desember 2002

1.7 Quarterly change in GDP in the US

Contribution to growth in volume, annualised. Per cent.

Seasonally adjusted

-4 -2 0 2 4 6 8 10 12

-4 -2 0 2 4 6 8 10 12

mar 00 sep 00 mar 01 sep 01 mar 02 sep 02

Public consumption and investment Net exports

Inventories Private investment Private consumption BNP

Source: Bureau of Economic Analysis, Norges Bank

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

80 82 84 86 88 90 92 94 96 98 00 02

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

1.8 US labour productivity

Private sector excluding agriculture. Rise on same quarter previous year

Source: EcoWin / FED.

Hovedstyret desember 2002

1.9 US - Consumer confidence

Index values. Monthly figures. Seasonally adjusted.

Consumer confidence 1985=100

0 20 40 60 80 100 120 140 160

1990 1992 1994 1996 1998 2000 2002

0 20 40 60 80 100 120 140 160

Source: Datastream / The Conference Board.

1.10 US – CPI

Monthly figures. Seasonally adjusted

0 2 4 6 8 10 12 14 16

80 82 84 86 88 90 92 94 96 98 00 02

0 2 4 6 8 10 12 14 16

-0,4 -0,2 0 0,2 0,4 0,6 0,8

jan mar mai jul sep nov jan mar mai jul sep nov -0,4 -0,2 0 0,2 0,4 0,6 0,8

Percentage change on same month previous year

Percentage change on previous month

Source: EcoWin \ Bureau of Labour Statistics.

Hovedstyret desember 2002

Euro area

Source: Eurostat / EcoWin

1.11 Euro area – quarterly change in GDP

Contribution to volume growth, annualised. Seasonally adjusted

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

2000 2001 2002

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

Net exports Public consumption

Private consumption Inventories

Investment GDP

Hovedstyret desember 2002

1.12 Industrial production

Volume. Seasonally adjusted. Percentage growth on same month of previous year.

-6 -3 0 3 6 9

1997 1998 1999 2000 2001 2002

-6 -3 0 3 6 9

Source: EcoWin / Deutsche Bundesbank, Eurostat and INSEE.

Euro area

France

Germany

1.13 Industrial confidence in the euro area and IFO index for Germany

Diffusion index. Seasonally adjusted

-30 -25 -20 -15 -10 -5 0 5 10 15

1995 1996 1997 1998 1999 2000 2001 2002 2003

70 80 90 100 110

Euro area (left-hand scale)

Source: EcoWin/EU Commission and IFO National Institute of Research

IFO index (right-hand scale)

Hovedstyret desember 2002

1)According to labour force survey

Source: EcoWin/Eurostat, Federal Labour Office and National Employment Office.

1.14 Unemployment ¹⁾

Per cent. Seasonally adjusted. Monthly figures

7 9 11 13

1997 1998 1999 2000 2001 2002

7 9 11 13 France

Germany Euro area

1.15 Euro area – Retail trade

Volume. Percentage change from same month of previous year. Seasonally adjusted. Monthly figures

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

1996 1997 1998 1999 2000 2001 2002

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

Source: EcoWin/ECB.

6-month moving average

Hovedstyret desember 2002

1.16 Euro area - harmonised index of consumer prices (HICP)

Percentage change on same month of previous year. Monthly figures

0 1 2 3

1998 1999 2000 2001 2002

0 1 2 3

Source: EcoWin/Eurostat.

HICP

HICP excl energy and food

1.17a Euro area – key rate

Short -term and long -term interest rates. Daily figures

0 2 4 6

1999 2000 2001 2002

0 2 4 6

Source: EcoWin/Hanson & Partners AB.

Key rate Long-term rate

Short-term rate

Hovedstyret desember 2002

1.17b Comparison of various European countries

53.8 1.4

5.0 1.7

1.7 Sweden

..

..

3.0 1.2

-0.2

Switzerland

38.5

-1.1

5.3 (Sep) 1.4

1.5 UK

69.6 -2.3

8.4 2.3

0.8 Euro area

44.0 2.0

4.7

2.7

1.5 Denmark

42.4 3.6

9.1

1.7

1.6 Finland

..

12.4

3.9 (Sep)

1.3

2.0

Norway

Public debt 2002 Gov’t budget

balance 2002 Unempl

Oct 2002 Growth in

HICP Oct 2002 Growth in

GDP 2002

The highest and lowest values appear in bold to illustrate the spread.

Sources: OECD, Eurostat, EU Commission, Ministry of Finance, Statistics Norway

42.4

3.6

9.1 1.7

1.6 Finland

105.6 -0.1

6.9

1.3

0.7 Belgium

63.2 -1.8

4.1 1.8

0.7 Austria

55.0 0.0

11.7

3.9

3.6

Greece

35.3

-1.0

4.4

4.4

3.6

Ireland

57.4 -3.4

4.9 4.1

0.4 Portugal

105.8 1.4

5.0 4.0

1.8 Spain

51.0 -0.8

2.4

3.6

0.1

Netherlands

110.3

-2.4

..

2.8 0.3

Italy

58.6 -2.7

8.8 1.9

1.0 France

60.9

-3.8

8.3

1.3

0.4 Germany

69.6 -2.3

8.4 2.3

0.8 Euro area

Public debt 2002 Gov’t budget

balance 2002 Unempl.

Oct 2002 Growth in

HICP Oct 2002 GDP growth

in 2002

1.17c Comparison of various European countries

Hovedstyret desember 2002

United Kingdom

1.18 United Kingdom – GDP growth

Average quarterly growth – annualised rate

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

1995 - 2000 2000 - 2002 Q3

Services GDP Manufacturing

Source: Office for National Statistics

Hovedstyret desember 2002

1.19 United Kingdom - GDP

Percentage change on same quarter previous year

- 0.1 - 1.6 - 5.6 4.6 4.1 1.4 Q2

1.5 Imports

0 Exports

- 6.7 Private investment

3.2 Public demand

3.8 Private consumption

1.8 GDP

Q3

Source: Office for National Statistics

80 85 90 95 100 105 110 115 120

1990 1992 1994 1996 1998 2000 2002

80 85 90 95 100 105 110 115 120

1.20 United Kingdom - Nominal effective exchange rate

A rise in value denotes appreciation January 1990 = 100

Source: Office for National Statistics

95 96 97 98 99 100 101

jan mar mai jul sep nov

1. January 2002 = 100

Hovedstyret desember 2002

1.21 United Kingdom - RPIX

Percentage change on same month previous year

-2 0 2 4 6

1995 1996 1997 1998 1999 2000 2001 2002

-2 0 2 4 6

Source: Office for National Statistics

Services

Goods RPIX

1.22 United Kingdom - Unemployment

0 2 4 6 8 10

1995 1996 1997 1998 1999 2000 2001 2002

0 2 4 6 8 10

Source: Office for National Statistics

Labour force survey (ILO)

Registered unemployed

Hovedstyret desember 2002

1.23 United Kingdom – House prices

Percentage change on same month previous year

-10 0 10 20 30 40

1995 1996 1997 1998 1999 2000 2001 2002

-10 0 10 20 30 40

Source: Office for National Statistics/Halifax Nation-wide

Halifax

1.24 United Kingdom – lending to individuals

Percentage change on same month previous year

8 10 12 14 16

Jun 00 Dec 00 Jun 01 Dec 01 Jun 02

8 10 12 14 16

Source: Bank of England

Total

Secured on dwellings Consumer credit

Hovedstyret desember 2002

-2 0 2 4 6

1995 1996 1997 1998 1999 2000 2001 2002 Source: Bank of England

MEW -as percentage of post-tax income

2nd quarter 2002

(in billions)

Net secured borrowing : £18.6 Not invested in housing stock : £10.6 Distributed by:

* Purchase of securities

* Repayment of loans without collateral

* Consumption

1.25 United Kingom – Mortgage equity withdrawal (MEW)

1.26 United Kingdom – current account balance

Percentage of GDP

-4 -3 -2 -1 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 -4 -3 -2 -1 0

Source: OECD EO 72

Hovedstyret desember 2002

1.27 United Kingdom – wage growth in economy as a whole

Percentage change on same month previous year

0 1 2 3 4 5 6 7

1995 1996 1997 1998 1999 2000 2001 2002

0 1 2 3 4 5 6 7

Source: Office for National Statistics

Sweden, Denmark and Finland

Hovedstyret desember 2002

1.28 Industrial production

Percentage change from same month previous year.

Seasonally adjusted. 3 month moving average

-10 -5 0 5 10 15 20

1995 1997 1999 2001

-10 -5 0 5 10 15 20

Sources: SCB / Statistics Finland / Statistics Denmark Sweden

Denmark

Finland

(incl. power plants)

1.29 Retail trade

Volume. Percentage change on same month previous year.

Seasonally adjusted. 3 month moving average

-3 0 3 6 9

1995 1996 1997 1998 1999 2000 2001 2002

-3 0 3 6 9

Sources: SCB / Statistics Finland / Statistics Denmark

Sweden

Denmark Finland

Hovedstyret desember 2002

1.30 Consumer price index

Percentage change on same month previous year

0 1 2 3 4

1995 1996 1997 1998 1999 2000 2001 2002

0 1 2 3 4

Sources: SCB / Statistics Finland / Statistics Denmark Denmark, HICP Sweden, UND1X

Finland, HICP

1.31 Key rates

Daily figures

0 2 4 6 8 10

1995 1996 1997 1998 1999 2000 2001 2002

0 2 4 6 8 10

Sources: EcoWin/Hanson & Partners AB.

Denmark Sweden

Hovedstyret desember 2002

Oil

1.32 Oil price, Brent Blend

USD per barrel. Daily figures

0 10 20 30 40

0 10 20 30 40

1999 2000 2001 2002 2003 2004

Sources: Norges Bank, Telerate and IPE

Futures prices 6. December 2002

IR 3/2002

Hovedstyret desember 2002

1.33 Iraq’s oil production

In million barrels per day

0 1 2 3 4

jan 00 jul 00 jan 01 jul 01 jan 02 jul 02

0 1 2 3 4

0 0,5 1 1,5 2 2,5 3

1990 1992 1994 1996 1998 2000

Source: Energy Information Agency

Annual figures

Monthly figures

1.34a OPEC 10 output and quotas and expected call on OPEC 10

Million barrels per day

20 22 24 26 28 30

1997 1998 1999 2000 2001 2002 2003

20 22 24 26 28 30

Sources: Bloomberg, IEA and Norges Bank

November report October report (EIA)

OPEC's quota OPEC output

Expected call on OPEC 10

Hovedstyret desember 2002

1.34b Global oil production

October 2002

Source: International Energy Agency US 10%

Mexico 5%

Norway 4%

Russia 10%

China 4%

Other 28 %

OPEC 39%

Saudi Arabia 25.6%

Iran 12,8%

Iraq 7.7%

UAE 7.7%

Venezuela 7.7%

Other 38.5%

1.34c Production and net export of oil (incl. NGL/condensate)

2001. Millions of barrel per day

0 2 4 6 8 10

Saudi Arabia US Russia Iran Mexico Norway China Venezuela Canada UAE

Source: Petroleum Economics Ltd

0 2 4 6 8

Saudi Arabia Russia Norway Iran Venezuela UAE Nigeria Iraq Kuwait Mexico

Production Net exports

Hovedstyret desember 2002

1.35 Non-commercial participants’ net positions in the futures market for WTI* so far in 2002

-60000 -40000 -20000 0 20000 40000 60000 80000

jan. feb. mar. apr. mai. jun. jul. aug. sep. okt. nov.

15 20 25 30 Oil price (right hand

scale)

Net long positions

Net short positions

Sources: Energy Information Administration, NYMEX * = West Texas Intermediate

USD/barrel Number of contracts

Source: U.S. Department of Energy

1.36 US crude oil stocks

Million barrels. Monthly figures

260 280 300 320 340 360

jan feb mar apr mai jun jul aug sep okt nov des

260 280 300 320 340 360

Highest and lowest values 2002 in the last five years

Hovedstyret desember 2002

Source: International Energy Agency

1.37 OECD total crude oil stocks

Million barrels. Monthly figures

750 800 850 900 950 1000 1050

jan feb mar apr mai jun jul aug sep okt nov des 750 800 850 900 950 1000 1050

2002 Highest and lowest values

in the last five years

1.38a Probability for the oil price in March 2003 at 6 December 2002

USD per barrel - West Texas Intermediate

0 2 4 6 8 10

0 5 10 15 20 25 30 35 40 45 50 55 60

USD Sources: Norges Bank and New York Mercantile Exchange

67 % 33 %

Probabilityper USD

Assumptions in IR 3/2002 adjusted for the differential between WTI and Brent Blend

Hovedstyret desember 2002

1.38b Probability for the oil price in June 2003 at 6 December 2002

USD per barrel - West Texas Intermediate

0 2 4 6 8 10

0 5 10 15 20 25 30 35 40 45 50 55 60

USD Sources: Norges Bank and New York Mercantile Exchange

64 % 36 %

Probabilityper USD

Assumptions in IR 3/2002 adjusted for the differential between WTI and Brent Blend

1.38c Probability for the oil price in December 2004 at 6 December 2002

USD per barrel - West Texas Intermediate

0 2 4 6 8 10

0 5 10 15 20 25 30 35 40 45 50 55 60

USD Sources: Norges Bank and New York Mercantile Exchange

35 % 65 %

Probabilityper USD

Assumptions in IR 3/2002 adjusted for the differential between WTI and Brent Blend

Hovedstyret desember 2002

1.39 Oil price and average price of exported Norwegian natural gas

Quarterly figures

0 5 10 15 20 25 30 35

1997 1998 1999 2000 2001 2002

0 0,2 0,4 0,6 0,8 1 1,2 1,4

Brent Blend (left-hand scale)

Natural gas

USD/barrel Kr/Sm³

Sources: Statstics Norway and Norges Bank

1.40 Oil price and natural gas price in the UK,

Monthly figures

0 5 10 15 20 25 30 35

1997 1998 1999 2000 2001 2002

0,00 0,05 0,10 0,15 0,20 0,25 0,30 0,35

Natural gas Brent Blend

(left-hand scale) USD/barrel

Sources: International Petroleum Exchange, Norges Bank

GBP/Therm