THE EXECUTIVE BOARD 16 MARCH 2016
Market developments
2
Selected equity price indices 1 Jan. 2015=100. 1 January 15 – 14 March 16
Prices in credit default market, European banking sector CDS indices. Basis points. 1 January 15 – 14 March 16
Source: Bloomberg
0
50
100
150
200
250
300
350
0
50
100
150
200
250
300
350
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16
Senior bank bonds
Subordinated debt
0
20
40
60
80
100
120
140
160
180
0
20
40
60
80
100
120
140
160
180
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16
USEuropeEmerging economiesChina
GDP growth for trading partners
3
Volume. Four-quarter change. Percent. Export weights. 2010 Q1– 2019 Q4
0.5
1
1.5
2
2.5
3
3.5
4
4.5
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Projections MPR 1/16
Projections MPR 4/15
Sources: Thomson Reuters and Norges Bank
Consumer prices, trading partners
4
Twelve-month change. Percent. January 2005 – February 20161)
-4
-2
0
2
4
6
8
-4
-2
0
2
4
6
8
2005 2007 2009 2011 2013 2015
Euro area UK Sweden US 1) The latest observation is February 2016 for the euro area and Sweden, and January 2016 for the UK and the US. Source: Thomson Reuters
5
-1
0
1
2
3
-1
0
1
2
3
2012 2013 2014 2015 2016 2017 2018 2019
USEuro areaUKSweden14 March 201611 December 2015
Actual and expected key rates1) Percent. January 2012 – December 2019
1) Broken lines show estimated forward rates at 11 December 2015. Solid lines show forward rates at 14 March 2016. Forward rates are based on Overnight Index Swap (OIS) rates. Sources: Bloomberg, Thomson Reuters and Norges Bank
Money market rates for trading partners1)
6
Percent. 2010 Q1 – 2019 Q4
0
0.5
1
1.5
2
0
0.5
1
1.5
2
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
14 March 2016
MPR 4/15
1) Blue and orange broken lines show forward rates for 14 March 2016 and 11 December 2015. Sources: Thomson Reuters and Norges Bank
Three-month Nibor spread1)
7
Pecentage points. 1 January 2014 – 31 December 20192)
1) Norges Banks estimates of the difference between three-month Nibor and expected key policy rate. Sources: Thomson Reuters and Norges Bank
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2014 2015 2016 2017 2018 2019
Three-month Nibor spread
MPR 1/16
MPR 4/15
Oil prices
8
USD/barrel. 1 January 2010 – 31 December 2019
0
20
40
60
80
100
120
140
160
0
20
40
60
80
100
120
140
160
2010 2012 2014 2016 2018
Oil priceOil futures prices 14 March 2016Oil futures prices 11 December 2015
Sources: Thomson Reuters and Norges Bank
Import-weighted exchange rate index (I-44)1)
9
1 June 2014 – 31 December 2016
84
88
92
96
100
104
108
112
84
88
92
96
100
104
108
112
Jun-14 Dec-14 Jun-15 Dec-151) A positive slope denotes a weaker krone exchange rate. Source: Norges Bank 9
Projections MPR 4/15
GDP mainland Norway
10
Four-quarter change. Percent. 2011 Q1 – 2016 Q2
Sources: Statistics Norway and Norges Bank
0
1
2
3
4
0
1
2
3
4
2011 2012 2013 2014 2015 2016
Regional network
SAM MPR 1/16
GDP mainland Norway
Expected output growth next six months, Norges Bank’s regional network1)
11
Annualised. Percent
-6-5-4-3-2-10123
-6-5-4-3-2-10123
August 2015
October 2015
February 2016
Construc-tion
Export industry
Domest.oriented
mfg.
Oil serv. export market
Oil serv. domest.market
Househ. services
Commerc. services
Retail trade
1)The network uses an index from −5 til +5, where −5 indicates that production is expected to decline by 10% or more annualised. Several oil service enterprises expect production to decline by more than 10% in the next six months. This is not reflected in the chart due to the limitations of the index. Source: Norges Bank
Petroleum investment
12
Volume. Annual change. Percent. 2011 – 2019
-20
-15
-10
-5
0
5
10
15
20
-20
-15
-10
-5
0
5
10
15
20
2011 2013 2015 2017 2019
MPR 4/15 MPR 1/16
Sources: Statistics Norway and Norges Bank
House prices in the largest cities
13
Twelve-month change. January 2010 – February 2016
-10
-5
0
5
10
15
20
-10
-5
0
5
10
15
20
2010 2011 2012 2013 2014 2015 2016
Oslo BergenTrondheim StavangerTromsø KristiansandDrammen
Sources: Eiendom Norge, FINN and Eiendomsverdi
Credit from selected funding sources to Norwegian non-financial enterprises
14
Twelve-month change. January 2011 – January 2016
-10
0
10
20
30
-10
0
10
20
30
2011 2012 2013 2014 2015 2016
Domestic notes and bonds
Foreign credit (mainland enterprises)
Domestic credit from banks andmortgage companies
Sources: Statistics Norway and Norges Bank
Unemployment rate
15
As percentage of the labour force. January 2006 – June 2016
0
1
2
3
4
5
0
1
2
3
4
5
2006 2008 2010 2012 2014 2016
LFS NAV
Sources: Statistics Norway, NAV and Norges Bank
Wage growth in 2016
16
Nominal wage growth. Percent
2.4 2.3 2.6
2.8 2.6
0
1
2
3
0
1
2
3
Managers Employers Employees MPR 4/15 MPR 1/16
Regional network
Expectations survey Projections
Sources: Epinion and Norges Bank
CPI-ATE. Total and by supplier sector
17
Twelve-month change. Percent. January 2014 – June 2016
00.511.522.533.544.55
00.5
11.5
22.5
33.5
44.5
5
Jan-14 Jul-14 Jan-15 Jul-15 Jan-16
CPI-ATEImported consumer goodsDomestically produced goods and servicesProjections MPR 1/16
Sources: Statistics Norway and Norges Bank
Expected consumer price inflation 2 and 5 years ahead1)
18
Percent. 2002 Q1 – 2016 Q1
0
1
2
3
4
5
6
0
1
2
3
4
5
6
2002 2005 2008 2011 2014
Expected inflation 2 years ahead Expected inflation 5 years ahead
1) Average of expectations of employer/employee organisations and economists in the financial industry and academia. Sources: Epinion, Opinion, TNS Gallup and Norges Bank
Factors behind changes in the interest rate forecast since MPR 4/15
19
Cumulative contribution. Percentage points. 2016 Q2 – 2018 Q4
-1.5
-1
-0.5
0
0.5
1
1.5
-1.5
-1
-0.5
0
0.5
1
1.5
2016Q2 2016Q4 2017Q2 2017Q4 2018Q2 2018Q4
Exchange rate Foreign demand
Foreign interest rates Money market premium
Domestic demand Wages and prices
Change in interest rate forecast
Source: Norges Bank
Baseline projections in Monetary Policy Report 1/16
20 Sources: Statistics Norway and Norges Bank
Output gap Key policy rate
CPI-ATE Exchange rate (I-44)
0
1
2
3
0
1
2
3
2010 2012 2014 2016 2018
MPR 1/16 MPR 4/15
-3-2-1012
-3-2-1012
2010 2012 2014 2016 2018
0
1
2
3
4
0
1
2
3
4
2010 2012 2014 2016 2018859095100105110
859095
100105110
2010 2012 2014 2016 2018
Private investment Mainland exports
Projections for key economic aggregates
21 Sources: Statistics Norway and Norges Bank
Private consumption and disposable real income GDP mainland Norway
012345
012345
2010 2012 2014 2016 2018012345
012345
2010 2012 2014 2016 2018
Disposable realincome MPR 1/16
0246810
02468
10
2010 2012 2014 2016 2018-10-5051015
-10-505
1015
2010 2012 2014 2016 2018
MPR 1/16 MPR 4/15
Change from previous year. Percent. 2010 – 2019
THE EXECUTIVE BOARD 16 MARCH 2016