charts for inflation report 1/2003. 30%50%70%90% chart 1 consumer price inflation 1). projection and...

Charts for Inflation Report 1/2003

0

1

2

3

4

5

2001 2002 2003 2004 20050

1

2

3

4

5

30% 50% 70% 90%

Chart 1 Consumer price inflation1). Projection and uncertainty based on a sight deposit rate of 5 ½ per cent and the average exchange rate for February. 12-month rise. Per cent.

1) Adjusted for tax changes and excluding energy products (CPI-ATE)

The bands in the fan indicate different probabilities for consumer price inflation.

Sources: Statistics Norway and Norges Bank

0

1

2

3

4

5

2001 2002 2003 2004 20050

1

2

3

4

5

30% 50% 70% 90%

Chart 2 Consumer price inflation1). Projection and uncertainty based on market expectations of the sight deposit rate and a weaker exchange rate. 12-month rise. Per cent.




0

2

4

6

8

10

1990 1992 1994 1996 1998 2000 20020

2

4

6

8

10

Norway

Trading partners

Chart 1.1 Labour costs¹) in Norway and among trading partners. Percentage change from previous year.

¹) Hourly labour costs in manufacturing

Sources: Ministry of Finance, TRCIS and Norges Bank

Chart 1.2 Three-month money market rates for Norway and the US.

0

2

4

6

8

10

1995 1997 1999 2001 20030

2

4

6

8

10

Sources: EcoWin and Norges Bank

Norway

US

Chart 1.3 Equity prices, long-term interest rates in the US, oil prices in USD and price of gold. Index, week 1 2001=100. Weekly figures.

60

80

100

120

140

jan 01 jul 01 jan 02 jul 02 jan 0360

80

100

120

140

Sources: EcoWin, The Economist and Wilshire Associates

Wilshire 5000

Oil price

Interest rates (10 years)

Gold price

1

2

3

4

5

2000 2001 2002 2003

80

90

100

110

120

Chart 1.4 Import-weighted exchange rate (I-44), trade-weighted exchange rate1) and interest rate differential against other countries2).. Weekly figures

1) A rising curve denotes an appreciation of the krone

Source: Norges Bank

I-44 (right-hand scale)3-month interest

rate differential (left-hand scale)

TWI (right-hand scale)

0

2

4

6

8

1995 1997 1999 2001 20030

2

4

6

8

Chart 1.5 Unemployed (LFS), registered unemployed and persons participating in labour market programmes. Percentage of labour force. Seasonally adjusted1)

Registered unemployed and labour market programmes

LFS unemployment

Registered unemployed

1) LFS unemployment: 3-month moving average

Sources: Statistics Norway and the Directorate of Labour

2,22

2,24

2,26

2,28

2,30

1998 1999 2000 2001 2002 20032,22

2,24

2,26

2,28

2,30

Chart 1.6 Employed persons according to LFS. Jan 1998 - Dec 2002. In millions. Seasonally adjusted

Source: Statistics Norway

-4

-2

0

2

4

6

1980 1985 1990 1995 2000-4

-2

0

2

4

6

Chart 1.7 The output gap1) in the Norwegian economy. 1980-2002

1) See box page 40.

Source: Norges Bank

-4

-2

0

2

4

6

1999 2000 2001 2002 2003-4

-2

0

2

4

6

Chart 1.8 Consumer prices adjusted for tax changes and excluding energy products (CPI-ATE). Total1) and by supplier sector2). 12-month rise. Per cent

1) Norges Bank's estimates up to July 2000, thereafter figures published by Statistics Norway2) Norges Bank's estimates


Goods and services produced in Norway

CPI-ATE

Imported consumer goods

0

2

4

6


2

4

6

Chart 1.9 Consumer prices adjusted for tax changes and excluding energy products (CPI-ATE). Domestic components. 12-month rise. Per cent


Services with wages as a dominant price factor

House rent

Other services

Domestically produced goods excl. energy products

-12

-9

-6

-3

0

3

6

1999 2000 2001 2002 2003-12

-9

-6

-3

0

3

6

Cars

Chart 1.10 Consumer prices for some imported goods adjusted for tax changes. 12-month rise. Per cent.


Clothing and footwear

Audiovisual equipment

0

1

2

3

4

5

6

1999 2000 2001 2002 20030

1

2

3

4

5

6

Chart 1.11 Consumer prices (CPI). Total and adjusted for tax changes and excluding energy products. 12-month rise. Per cent

CPI-AT: CPI adjusted for tax changesCPI-ATE: CPI adjusted for tax changes and excluding energy products1) Norges Bank's estimates up to July 2000, thereafter figures published by Statistics Norway


CPI-AT1)

CPI-ATE1)

CPI

50

100

150

200

250

300

350

2000 2001 2002 200350

100

150

200

250

300

350

Chart 1.12 Electricity prices. Index. 1 January 1998= 100

Sources: Statistics Norway, Nord Pool, The Norwegian Water Resources and Energy Directorate and Norges Bank

Spot prices including taxes and transmission tariffs

Electricity in CPI

Source: EcoWin

40

60

80

100

120


60

80

100

120

All share Index EnergyManufacturing FinanceICT*

* The ICT (Information and Communication Technology) index is calculated as the average sum of the IT and Telecom indices.

Chart 1.13 Developments in some indices on the Oslo Stock Exchange. Daily figures, 01.01.01. – 27.02.03

0

5

10

15

20

1997 1998 1999 2000 2001 2002 20030

5

10

15

20

Chart 1.14 Credit from domestic sources (C2). 12-month growth. Per cent


Credit to households

Credit to non-financial enterprises

Credit to municipalities

Chart 1.15 Norges Bank`s sight deposit rate and short-term money market rates. Nominal market rates. Daily figures, 01.01.01 – 28.02.03.

5

6

7

8

9

2001 2002 20035

6

7

8

9

Source: Norges Bank

Sight deposit rate

1-week rate

3-month rate

Source: Norges Bank

Chart 1.16 Forward rates for Norway and Germany. Calculated future short-term rates 2002-2013.

0

2

4

6

8

02 04 06 08 10 12 140

2

4

6

8

28 February

24 October

Norway

Germany

Chart 1.17 Interest rate expectations in the US. Actual development and expected key rate.

0

2

4

6

1999 2000 2001 2002 2003 20040

2

4

6

Source: Norges Bank

1 JulyKey rate

24 February

24 October

0

2

4

6

1999 2000 2001 2002 2003 20040

2

4

6

Source: Norges Bank

1 JulyKey rate

24 February

24 October

Chart 1.18 Interest rate expectations in the euro area. Actual development and expected key rate.

5,5

6

6,5

7

7,5

8

5,5

6

6,5

7

7,5

8

01.11 01.12 01.01 01.02

Chart 1.19 Interval for the sight deposit rate in Strategy Document 3/2002 for November 2002 to the end of February 2003 and actual development.

Interval in Strategy Document 3/02

Sight deposit rate

Source: Norges Bank

Chart 2.1 GDP growth in the US, Japan and the euro area. Seasonally adjusted volume growth from the previous quarter. Per cent.

-2

-1

0

1

2

2001 2002-2

-1

0

1

2US Japan

Euro area Trading partners

Sources: BEA, EU Com., Eurostat, Economic Planning Agency, National Statistics, EcoWin and Norges Bank

Chart 2.2 Gross business investment. Volume1) . Index Q1 2000 = 100.

85

90

95

100

105

110

115

2000 2001 200285

90

95

100

105

110

115

Euro area

US

Japan

UK

Sweden

1) Figures for Sweden and the euro area include dwellings

Sources: EcoWin, US Department of Commerce, National Statistics, ESRI, EUROSTAT and Statistics Sweden

60

90

120

150

1997 1998 1999 2000 2001 2002 2003-30

-20

-10

0

10

Sources: European Commission and The Conference Board

Euro area(right-hand scale)

US (left-hand scale)

UK (right-hand scale)

Chart 2.3 Consumer confidence indicators in the US, the UK and the euro area. Seasonally adjusted diffusion index. Monthly figures

Chart 2.4 Key rates.

0

2

4

6

1999 2000 2001 2002 20030

2

4

6

Source: EcoWin

UK

Euro area

US

Japan

Source: EcoWin

Chart 2.5 Current balance in Japan, Germany and the US. Per cent of GDP. Quarterly figures.

-6

-4

-2

0

2

4

6

1998 1999 2000 2001 2002-6

-4

-2

0

2

4

6

US

Japan

Germany

Chart 2.6 Producer prices. Index, Jan.1999 = 100. Monthly figures.

97

100

103

106

109

112

1999 2000 2001 2002 200397

100

103

106

109

112

Sources: Datastream and Norges Bank

US

UK

Japan

Trading partners

Euro area

Chart 2.7 Rise in prices for goods in the consumer price index. Percentage change from the same quarter the previous year.

-3

-2

-1

0

1

2

3

1997 1998 1999 2000 2001 2002-3

-2

-1

0

1

2

3

Source: Datastream

US, excl. food and energy

UK

Euro area, excl. food and energy

Japan

Chart 2.8 Rise in prices for services in the consumer price index and wage growth. Percentage change from the same quarter last year.

0

1

2

3

4

5

1997 1998 1999 2000 2001 20020

1

2

3

4

5

Sources: EcoWin and Datastream

US

Euro area

CPI Wage growth

Chart 2.9 Oil prices Brent Blend. USD per barrel. Daily figures.

0

10

20

30

40

1999 2000 2001 2002 2003 20040

10

20

30

40

Sources: Telerate, IPE and Norges Bank

Futures27 February 2003

IR 1/03

-4

-2

0

2

4

-4

-2

0

2

4

1990 1994 1998 2002

Chart 3.1 The output gap in the Norwegian economy. 1990-2005

Source: Norges Bank

-15

0

15

1970 1980 1990 2000-15

0

15Local currency

Common currency

Chart 3.2 Relative labour costs. Divergence from the average since 1970.Per cent. 1970 – 2003.

Sources: Ministry of Finance, TRCIS and Norges Bank

-10

-5

0

5

10

15

1990 1992 1994 1996 1998 2000 2002-10

-5

0

5

10

15

Chart 3.3 Industrial confidence indicator. Seasonally adjusted diffusion index1).

1) Values below zero indicate that the majority of the industrial leaders expect weaker development the coming three months.

Source: Statistics Norway and Norges Bank

0

20

40

60

80

1988 1991 1994 1997 2000 20030

20

40

60

80

Chart 3.4 Petroleum investment. Actual investment and projections. Billions of NOK. Constant 1999 prices.


0

2

4

6

Q3 00 Q1 02 Q3 01 Q1 02 Q3 020

2

4

6

Transport1)

Chart 3.5 Gross investment in the service sector. Billions of NOK. Constant 1999 prices.

1) Excluding pipeline transport and foreign shipping


Business services

Retail trade

Post and telecommunications

-30

-15

0

15

30

45

1999 2000 2001 2002 2003-30

-15

0

15

30

45

Total

Personal financial situation

The country`s economic situation

Chart 3.6 Consumer confidence indicator1). Unadjusted figures. 1999 Q1 - 2002 Q3

1) Provides an expression of the share with a positive assessment of the current situation and outlook for the future less the share with a negative assessment.

Source: Norsk Gallup Institutt AS

0

5

10

15

20

25

1998 2000 20020

5

10

15

20

25

Chart 3.7 House prices and credit to households. 12-month rise. Per cent

Sources: Norwegian Association of Real Estate Agents, FINN.no, ECON and Norges Bank


House prices

90

110

130

150

170

1980 1984 1988 1992 1996 20000

3

6

9

12

Chart 3.8 Household debt as a percentage of disposable income¹) and household interest expenses after tax as a percentage of cash income. 1980-2002

Interest expenses(right-hand scale)

Debt(left-hand scale)

1) Figures for household disposable income taken from the national accounts


-3

-2

-1

0

1

2

-3

-2

-1

0

1

2

1990 1995 2000 2005

Chart 3.9 Change in the structural non-oil budget balance1). 1990-2003

1) The budget balance as a percentage of trend mainland GDP; change from previous year.

Source: National Budget 2003 and Norges Bank

0

1

2

3

4

5

6

2001 2004 2007 20100

1

2

3

4

5

6

Chart 3.10 Structural non-oil deficit. Per cent of trend mainland GDP.

Sources: Long-Term Programme 2002 – 2005, Revised National Budget 2002 and National Budget 2003

Revised National Budget 2002

Long-Term Programme

National Budget 2003

55

65

75

85

95

1993 1996 1999 200255

65

75

85

95

Manufacturing

Other market-oriented activities in mainland Norway

Chart 3.11 Wage shares. Labour costs as a share of factor costs. Per cent.

Sources: TRCIS and Statistics Norway

0

2

4

6

8

1980 1984 1988 1992 1996 2000 2004-4

-2

0

2

4

Chart 3.12 Change in employment from previous year. Per cent. Unemployment1) as a percentage of the labour force. 1980-2005

1) According to LFS


Unemployment rate, LFS(left-hand scale)

Employed(right-hand scale)

67

69

71

73

75

1980 1985 1990 1995 2000 2005-4

-2

0

2

4

Chart 3.13 Change in the labour force from previous year. Per cent. The labour force as a percentage of the population aged 16-74 (labour force participation rate). 1980-2005


Change in labour force (right-hand scale)

Labour force participation rate(left-hand scale)

Source: Norges Bank

Chart 4.1 Technical assumption for the exchange rate in the baseline scenario.

84

88

92

96

100

104

108

2001 2002 2003 200484

88

92

96

100

104

108

IR 1/03: 94.8

IR 1/03: 88.3

Trade-weighted exchange rate index (1990=100)

Import-weighted exchange rate

(1995=100)

0

2

4

6

8

10

1995 1997 1999 2001 2003 20050

2

4

6

8

10

Source: Norges Bank

Sight deposit rate

3-month money market rate

IR 1/03: 5.5

Chart 4.2 Technical assumption for the sight deposit rate in the baseline scenario.

-1

0

1

2

3

4

5

2000 2001 2002 2003 2004 2005-1

0

1

2

3

4

5

Chart 4.3 Consumer and producer prices. Trading partners. Percentage rise.

Source: Datastream, OECD and Norges Bank

Producer prices

Consumer prices

0

1

2

3

4

5

2001 2002 2003 2004 20050

1

2

3

4

5

30% 50% 70% 90%

Chart 4.4 Consumer price inflation1). Projection and uncertainty based on a sight deposit rate of 5½ per cent and the average exchange rate for February. 12-month rise. Per cent.




-4

-2

0

2

4

6

2001 2002 2003 2004 2005-4

-2

0

2

4

6

CPI-ATE

Chart 4.5 Consumer prices adjusted for tax changes and excluding energy products (CPI-ATE) in the baseline scenario. Total and distributed by supplier sector. 12-month rise. Per cent


Goods and services produced in Norway

Imported consumer goods

-2

0

2

4

6

2001 2002 2003 2004 2005-2

0

2

4

6

Chart 4.6 Consumer prices (CPI) in the baseline scenario. Total and adjusted for tax changes and excluding energy products (CPI-ATE). 12-month rise. Per cent.

CPI

CPI-ATE


Chart 4.7 Forward rate for NOK (I-44) and technical assumption in the baseline scenario. Index.

80

90

100

110

1999 2001 2003 200580

90

100

110

Source: Norges Bank

Forward rate

Average last month (88.3)

Import-weighted exchange rate (I-44)

Chart 4.8 Expectations concerning short-term money market rates1) and technical assumption in the baseline scenario. Per cent.

0

2

4

6

8

10

2000 2001 2002 2003 2004 20050

2

4

6

8

10

1) Three-month money market rates up to and including Q4. Three-month forward rates are estimated using four money market rates and five government bond yields with diffrerent maturities as observed on 28 February.

Source: Norges Bank

Forward interest rates on 28 February

Assumption IR 1/03

0

1

2

3

4

2001 2002 2003 2004 20050

1

2

3

4

CPI-ATE

Forward interest rate and forward exchange rate

Baseline scenario

Chart 4.9 Different scenarios for consumer prices adjusted for tax changes and excluding energy products (CPI-ATE) with different assumptions for interest rate and exchange rate. 12-month rise. Per cent


0

1

2

3

4

5

2001 2002 2003 2004 20050

1

2

3

4

5

30% 50% 70% 90%

Chart 4.10 Consumer price inflation1). Projection and uncertainty based on forward interest rates and exchange rates. 12-month rise. Per cent.




Source: Norges Bank

Chart 1 Trade-weighted exchange rate index (TWI) and three-month interest rate differential. July 1999 – Jan 2003.

0

1

2

3

4

5

1999 2000 2001 2002 2003

90

95

100

105

110

115

Interest rate differential, (left-hand scale)

TWI, (right-hand scale1) )

1) A rising curve denotes an appreciation of the krone

Sources: EcoWin and Norges Bank

Chart 2 Trade-weighted exchange rate index (TWI) and equity prices in the US (S&P 500). July1999 – Jan 2003.

600

800

1000

1200

1400

1600

1999 2000 2001 2002 200390

95

100

105

110

115Equity prices, (left-hand scale)


1) A falling curve denotes an appreciation of the krone

Source: Norges Bank

6

9

12

15

18

21

1999 2000 2001 2002 200390

95

100

105

110

115

GHI, (left-hand scale)

Chart 3 Trade-weighted exchange rate index (TWI) and GHI. July1999 – Jan 2003.



Source: Norges Bank

10

15

20

25

30

35

1999 2000 2001 2002 2003

90

95

100

105

110

115

Oil price, (left-hand scale2) )

1) A rising curve denotes an appreciation of the krone2) USD per barrel

Chart 4 Trade-weighted exchange rate index (TWI) and oil price (Brent Blend). July 1999 – Jan 2003.


Source: Norges Bank

90

95

100

105

110

115

1999 2000 2001 2002 200390

95

100

105

110

115

Actual

Estimated

Chart 5 Actual and predicted value of the trade-weighted exchange rate index (TWI). July 1999 – Jan 2003.


Chart 1 Actual GDP and trend GDP. Billions of NOK.

Constant 1999-prices. 1980-20021)

600

800

1000

1200

1980 1984 1988 1992 1996 2000600

800

1000

1200

1) GDP figures for 2002 are estimates. Figures for trend output up to and including 1999 are calculated by using the Hodrick-Prescott filter. Thereafter the trend is an estimate.

Trend

Actual GDP


Chart 2 The output gap in the Norwegian economy. Deviations from trend mainland GDP in per cent. 1980-2002.

-4

-2

0

2

4

6

1980 1984 1988 1992 1996 2000-4

-2

0

2

4

6

Source: Norges Bank

70

80

90

100

1995 1997 1999 2001 200370

80

90

100

Chart 1 Sterling. Consumer price inflation, cars and motorcycles. UK. Index 1996=100. Jan. 95/ Jan.96 - Jan. 03.

Sources: National Statistics, Bank of England and Norges Bank

Nominal exchange rate

Cars and motorcycles1

1Price index for purchase of Vehicles in Harmonised Index of Consumer Prices (HICP).

85

90

95

100

105

110

1996 1998 2000 200285

90

95

100

105

110


Import-weighted exchange rate I-44

Chart 2 Import-weighted exchange rate (I-44) and consumer price inflation for cars and motorcycles. Index. 1996=100. Jan. 96 - Jan. 03.

Cars and motorcycles

Chart 1 Projections for some main macroeconomic aggregates for 2001 and actual developments. Annual growth. Per cent.

0

1

2

3

4

5

6Projections for 2001 Actual

DemandMainland Norway

GDPMainland Norway

Registered unemployed (rate)

Annual wage growth

CPI

Chart 2 Projections for some main macroeconomic aggregates for 2002 and actual developments1). Annual growth. Per cent..

0

1

2

3

4

5

6

Projections for 2002 Actual

1) Actual developments based on estimates in IR 1/03

DemandMainland Norway

GDPMainland Norway

Registered unemployed (rate)

Annual wage growth

CPI-ATE

Source: Statistics Norway

Chart 1 Inflation (CPI-ATE). Actual and projected. 12-month rise. Per cent.

0

1

2

3

4

2000 2001 2002 2003 20040

1

2

3

4

CPI-ATE: CPI adjusted for tax changes and excluding energy products

Source: Norges Bank

Chart 2 Alternative scenarios for the interest rate.

3

4

5

6

7

8

9

2002 2003 2004 20053

4

5

6

7

8

9

Alternative B

Baseline

Alternative A

Chart 3 Inflation with different scenarios for the interest rate. Actual and projected. 12-month rise. Per cent.

0

1

2

3

4

2002 2003 20040

1

2

3

4

CPI-ATE

Baseline

Alternative A

Alternative B


Source: Norges Bank

Chart 4 GDP with alternative scenarios for the interest rate. Deviations from GDP in per cent.

-1

-0,5

0

0,5

1

1,5

2002 2003 2004-1

-0,5

0

0,5

1

1,5

Alternative A

Alternative B

Source: Norges Bank

Chart 5 Alternative scenarios for the import-weighted exchange rate (I-44).

80

90

100

110

1999 2000 2001 2002 2003 200480

90

100

110

Forward rates

Stronger rate

Import-weighted exchange rate, I-44

Average last 3 months (89.0)

Chart 6 Inflation with alternative scenarios for the import-weighted exchange rate. Actual and projected. 12-month rise in per cent.

0

1

2

3

4

2001 2002 2003 20040

1

2

3

4

Forward rates

Stronger rate

CPI-ATE

Average last 3 months


0

2

4

6

8

10

12

1995 1996 1997 1998 1999 2000 2001 2002 20030

2

4

6

8

10

12

Source: Norges Bank

Sight deposit rate


3-month money market rate and sight deposit rate. Monthly figures. Jan. 1995 – Feb. 2003.

0

1

2

3

4

5

6

7

1995 1996 1997 1998 1999 2000 2001 2002 20030

1

2

3

4

5

6

7

1) Theoretical ECU rate up to and including Dec 98

Source: Norges Bank

Euro area1)

US

Japan

3-month rates in the US, Euro area and Japan. Per cent. Monthly figures. Jan. 1995 – Feb. 2003.

85

90

95

100

105

110

115

1995 1996 1997 1998 1999 2000 2001 2002 200385

90

95

100

105

110

115

Source: Norges Bank

Import weighted exchange rate, I-44

(1995=100)


Trade-weighted exchange rate index and import-weighted exchange rate I-44. Monthly figures. Jan. 1995 – Feb. 2003.

0

5

10

15

1997 1998 1999 2000 2001 2002 20030

5

10

15

Source: Norges Bank


C2

The credit indicator (C2), credit to households and total credit to the non-financial private sector and municipalities, mainland Norway (C3). 12-month growth. Per cent. Jan. 1995 – Jan. 2003.

C3 Mainland Norway

Source: Norges Bank

Technical assumption for the exchange rate in the baseline scenario.

84

88

92

96

100

104

108

2001 2002 2003 200484

88

92

96

100

104

108

IR 1/03: 94.8

IR 1/03: 88.3


Import-weighted exchange rate, I-44 (1995=100)

0

2

4

6

8

10

1995 1997 1999 2001 2003 20050

2

4

6

8

10

Source: Norges Bank

Sight deposit rate


IR 1/03: 5.5

Technical assumption for the sight deposit rate in the baseline scenario.

charts for inflation report 1/2003. 30%50%70%90% chart 1 consumer price inflation 1). projection and...

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