Economic
perspectives
Charts
Address by Governor Svein Gjedrem
at the meeting of the Supervisory Council of Norges Bank
on Thursday, 12 February 2009
Fall in all countries and markets
Index. 1 January 2004 = 100. 1 January 2004 – 10 February 2009
Equity prices
0 100 200 300 400 500
Oil price1)
Cargo
rates2) 85
90 95 100 105 110 115
Japan
Prices
0 50 100 150 200 250 300
Emerging markets
OECD
Industrial production
US
Source: Thomson Reuters 1) Brent blend
2) Baltic Dry Index
Inflation and the Icelandic krona (ISK) 1)
1 January 2003 – 4 February 2009 Inflation
12-month change. Per cent
0 2 4 6 8 10 12 14 16 18 20
ISK to NOK
2)0 5 10 15 20 25 30 35 40
Sources: Thomson Reuters and Norges Bank 1) As from 9 December 2008 ,foreign exchange market listings are used for the
ISK/NOK exchange rate
2) A rising curve denotes a weaker krone exchange rate.
NOK to EUR
1 January 2008 – 10 February 2009
Rate
1)7.5 8.5 9.5 10.5
Daily fluctuation in NOK
2)0 0.1 0.2 0.3
1) A rising curve denotes a weaker krone exchange rate.
2) Difference between highest and lowest rate during the day. 10-day moving average
Source: Thomson Reuters
Key rates abroad
Per cent. 1 January 2003 – 10 February 2009
0 1 2 3 4 5 6 7
0 1 2 3 4 5 6 7
UK
US Euro area
Source: Thomson Reuters
Government supply of capital 1)
Per cent. 2008 and 2009
Share of equity capital
2)Citigroup Bank of America 0
20 40 60
80 Share of core capital
3)Royal Bank of
Scotland Lloyds Commerz -bank
0 20 40 60 80
Source: Bloomberg 1) Planned and transferred capital.
2) Supply of equity capital as share of equity capital.
3) Supply of core capital as share of core capital.
Norges Bank’s key policy rate
Per cent. 1 January 2003 – 10 February 2009
0 1 2 3 4 5 6 7
0 1 2 3 4 5 6 7
Source: Norges Bank
Liquidity
12-month change. 3-month moving average. Per cent.
January 2005 – December 2008
-40 -20 0 20 40 60 80 100
-40 -20 0 20 40 60 80 100
Enter- prises2)
Banks1)
1) Banks’ liquidity expressed as the sum of banks’ and money holding sector’s stock of Norwegian banknotes and coins in circulation plus their deposits in Norges Bank (M0).
2) Enterprises’ liquidity expressed as non-financial enterprises’ stock of Norwegian banknotes and
coins, unrestricted bank deposits, certificates of deposit (M2). Sources: Statistics Norway and Norges Bank
Current accounts US and China
In billions of USD. 1980 – 2007
31/12/1980 29/12/1995
-800 -600 -400 -200 0 200 400
-800 -600 -400 -200 0 200 400
China
US
Source: Thomson Reuters
National income
1)Total growth from 2002 to 2007. Per cent
Denmark UK Sweden US Norway
0 10 20 30 40 50 60
Source: OECD 1) Disposable national income, in nominal terms
Inflation
12-month change. Per cent. January 2000 – January 2009
-2 -1 0 1 2 3 4 5 6
-2 -1 0 1 2 3 4 5 6
Inflation
1)Underlying infla- tion
2)Sources: Statistics Norway and Norges Bank 1) CPI
2) CPI adjusted for tax changes and excluding temporary changes in energy prices. See Norges Bank’s Staff Memo 2008/7 for a description of the CPIXE.
Consumer spending and house prices
Index. 1 January 2004 = 100
80 90 100 110 120 130 140 150 160
80 90 100 110 120 130 140 150 160
House prices
Consumer spending
Sources: Norwegian Association of Real Estate Agents, Association of Real Estate Agency Firms, FINN.no, ECON Pöyry, Statistics Norway and Norges Bank
Premiums in international money markets 1)
5-day moving average. Percentage points. 1 June 2007 – 1 February 2009
0 0.4 0.8 1.2 1.6 2 2.4 2.8
0 0.4 0.8 1.2 1.6 2 2.4 2.8
Source: Thomson Reuters 1) Average of the spread between 3-month money market rates and expected key rates in
the US, UK and euro area.
Norway’s terms of trade
Export prices/import prices. 1978 – 2009
1)0.5 0.6 0.7 0.8 0.9 1 1.1 1.2 1.3
0.5 0.6 0.7 0.8 0.9 1 1.1 1.2 1.3
Sources: Statistics Norway, Thomson Reuters and Norges Bank 1) Projections for 2008 and 2009.
Relative labour costs 1)
Deviation from average. 1970 – January 2009. Per cent
-20 -10 0 10 20
-20 -10 0 10 20
Weaker competi- tiveness
January 2009
1) In relation to our trading partners. Measured in a common currency. Expresses the competitiveness of Norway. The average is calculated from1970 to 2008.
Sources: Statistics Norway, the Technical Reporting Committee on Income Settlements(TRC), Ministry of Finance and Norges Bank
Debt to income ratio 1)
Quarterly figures. 1987 Q1 – 2008 Q4
1 1.2 1.4 1.6 1.8 2 2.2
1 1.2 1.4 1.6 1.8 2 2.2
1) Household debt as a share of liquid disposable income adjusted for projected reinvested
share dividends. Sources: Statistics Norway and Norges Bank
Interest rate premiums on government debt 1)
Compared with Germany. Percentage points.
1 January 2008 – 10 February 2009
0 1 2 3 4
0 1 2 3 4
Spain Greece
Italy
Netherlands
Source: Thomson Reuters 1) 5-year government bonds.
Size of the banking sector
Total assets as share of GDP. 2001 - 2007
0 2 4 6 8 10
0 2 4 6 8 10
Switzerland2) UK2)
Iceland3)
Swe- den4) Norway5)
1) All banks, excluding foreign-owned branches 2) UK resident banks
3) Kaupthing, Landsbanki and Glitnir and their foreign subsidiaries 4) All banks
5) All banks, excluding foreign-owned branches and subsidiaries
Sources: Swiss National Bank, Bank of England, Riksbanken, IMF, Financial Supervisory Authorities Iceland and Norges Bank
Petroleum revenue spending in the government budget
In billions of NOK. 2001 - 2007
0 20 40 60 80 100
0 20 40 60 80 100
Source: Ministry of Finance
Inflation
Moving 10-year average
1)and variation
2)in CPI
3). Per cent. 1980 - 2008
0 2 4 6 8 10 12 14
0 2 4 6 8 10 12 14
CPI Variation
Inflation target
1) The moving average is calculated 7 years back and 2 years ahead.
2) The band around the CPI is the variation adjusted for tax changes and excluding energy products in the average period, measured by +/- one standard deviation.
3) Projections for 2008 – 2010 from PPR 3/08 form the basis for this estimate. Sources: Statistics Norway and Norges Bank
Banks’ equity capital 1)
Per cent of total assets. 1875 - 2008
0 5 10 15 20
0 5 10 15 20
Sources: Klovland (2007), Statistics Norway and Norges Bank 1) Includes savings and commercial banks
Banks’ sources of funding in Norway 1)
Per cent of total assets. 1875 - 2008
0 20 40 60 80 100
0 20 40 60 80
Equity capital
100
Deposits
Market funding and other debt
Sources: Klovland (2007), Matre (1992), Statistics Norway and Norges Bank 1) Includes savings and commercial banks
Purchase of equities
Index.1997 Q4 = 0. Billions of NOK.1998 Q1 – 2008 Q4
-50 0 50 100 150 200
-50 0 50 100 150 200
Return on equities, index
Purchase of equities, NOK bn
Source: Norges Bank
Ownership interests in stock markets
Per cent. 1998 – 2008
1)0 0.2 0.4 0.6 0.8 1 1.2 1.4
0 0.2 0.4 0.6 0.8 1 1.2 1.4
Americas Europe Asia and Oceania
Sources: FTSE and Norges Bank 1) Figures for 2008 up to 2008 Q3.
