Charts for Inflation Report 3/2003 2 pm. Summary

Charts for Inflation Report3/2003

2 pm

Summary

Chart 1 Projections for the CPI-ATE and the output gap1). Per cent

-2

-1

0

1

2

3

2002 2003 2004 2005 2006-2

-1

0

1

2

3

1) The output gap is a measure of the difference between actual and trend output. See box in IR 1/03.

Sources: Statistics Norway and Norges Bank

CPI-ATE

Output gap

Chart 2 Projections and uncertainty for the CPI-ATE. 12-month rise. Per cent

0

1

2

3

4

5

2001 2002 2003 2004 2005 20060

1

2

3

4

5

30% 50% 70% 90%

The bands in the fan indicate different probabilities for the CPI-ATE.


Chapter 1

1.1 The economic situation

Chart 1.1 Real interest rate after tax1) 1985 Q1 – 2003 Q3.

-3

0

3

6

9

1985 1988 1991 1994 1997 2000 2003-3

0

3

6

9

1) 3-month money market rates deflated by the CPI excluding energy products up to 1995, Norges Bank's estimates for the CPI adjusted for tax changes and excluding energy products from June 1995 to July 2000, then the CPI-ATE. The same deflator is used for 5-year government bond yields, but from 2001 Q2 the inflation target of 2.5 per cent is used.


3-month rate

5-year rate

-4

-2

0

2

4

1980 1984 1988 1992 1996 2000-4

-2

0

2

4

1) GDP figures for 2003 are based on estimates.

Source: Norges Bank

Chart 1.2 The output gap. Percentage deviation from trend GDP. Annual figures. 1980-2003.1)

-15

-10

-5

0

5

10

15

20

1970 1980 1990 2000-15

-10

-5

0

5

10

15

20

1) Hourly labour costs in manufacturing2) Estimates for 2003. For relative labour costs in common currency, the projection for 2003 is based on a continuation of the average exchange rate in October (at 23 October) for the remainder of the year.3)Wage growth for 2003 is based on projections.

Sources: TRCIS, Ministry of Finance and Norges Bank

Chart 1.3 Relative labour costs¹): Norway and trading partners2). Deviation from average 1970 - 2002. Per cent. Annual figures. 1970 - 20033)

Local currency

Common currency

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

Source: Statistics Norway

Chart 1.4 Employed persons according to the LFS. In millions, Jan 98 – Jul 03. Seasonally adjusted

1.2 Consumer price inflation

Chart 1.5 CPI-ATE. Total1) and by supplier sector.2) 12-month rise. Per cent. Jan 99. - Sept 03

-5

-3

-1

1

3

5

1999 2000 2001 2002 2003-5

-3

-1

1

3

5

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


Goods and services produced in Norway

CPI-ATE

Imported consumer goods

Chart 1.6 Prices for some imported consumer goods adjusted for tax changes. 12-month rise. Per cent. Jan 01 - Sept 03.

-15

-10

-5

0

5

2001 2002 2003-15

-10

-5

0

5

Percentage share of CPI-ATE in brackets


Cars (9)

Clothing and footwear (7)

Audio-visual equipment (3)

Chart 1.7 Prices for some imported consumer goods adjusted for tax changes. Index. 1990=100. Annual figures. 1990 - 2002.

60

80

100

120

140

1990 1992 1994 1996 1998 2000 200260

80

100

120

140


Footwear

Domestic appliances

Audio-visual equipment

Clothing

Chart 1.8 Goods and services produced in Norway in the CPI-ATE. 12-month rise. Per cent. Jan 01 - Sept 03.

0

1

2

3

4

5

6

7

2001 2002 20030

1

2

3

4

5

6

7

1) Excluding agricultural and fish products

Percentage share of CPI-ATE in brackets


Consumer goods produced in Norwayexcluding energy products1) (18)

House rent (18)

Services with wages as a dominant factor (7)

Other services (21)

Chart 1.9 Consumer prices. Total and adjusted for tax changes and excluding energy products. 12-month rise. Per cent. Jan 99. - Sept 03.

0

1

2

3

4

5

6

1999 2000 2001 2002 20030

1

2

3

4

5

6

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


CPI

CPI-AT1)

CPI-ATE1)

Chart 1.10 Electricity prices. Index. 1 January 1998=100

50

100

150

200

250

300

350

2001 2002 200350

100

150

200

250

300

350

Sources: Statistics Norway, Nordpool, the Norwegian Water Resources and Energy Directorate and Norges Bank

Electricity in the CPI

Spot price including tax and grid rental

1.3 Financial markets

Sources: EcoWin and Norges Bank

Chart 1.11 Movements in the Oslo Stock Exchange OSEBX index, 5-year government bond yields in Norway and the US. Daily figures. 1 Jun 02 - 23 Oct 03

80

100

120

140

160

180

200

jun 02 okt 02 feb 03 jun 03 okt 030

1

2

3

4

5

6

7

OSEBX(left-hand scale)

5-year gov't bond yields Norway (right-hand scale)

5-year gov't bond yields US(right-hand scale)

Source: Norges Bank

Chart 1.12 Three-month money market rates and forward rates. Monthly figures, 1995-2013.

-2

0

2

4

6

8

95 97 99 01 03 05 07 09 11 13-2

0

2

4

6

8Actual

ForwardNorway

Trading partners

Difference

Chart 1.13 Import-weighted exchange rate (I-44), trade-weighted exchange rate index1) and interest rate differential against other countries. Jan 95 - 23 Oct. 03.

-2

-1

0

1

2

3

4

5

1995 1997 1999 2001 2003

80

90

100

110

120

TWI (right-hand scale)

I-44 (right-hand scale)

3-month nterest rate differential

(left-hand scale)

1)A risng curve denotes an appreciation of the krone

Source: Norges Bank

Chart 1.14 The krone exchange rate against EUR and USD1). Weekly figures. 12 Jan 02 - 23 Oct 03

6

7

8

9

10jan 02 mai 02 sep 02 jan 03 mai 03 sep 03

6

7

8

9

10

NOK/EUR

NOK/USD


Source: Norges Bank

Chart 1.15 Import-weighted exchange rate (I-44)1) and sight deposit rate. Daily figures. 2 Jan 01 - 23 Oct 03

0

2

4

6

8

jan 01 jul 01 jan 02 jul 02 jan 03 jul 03

80

90

100

110

I-44 (right-hand scale)

Sight deposit rate(left-hand scale)


Source: Norges Bank

1.4 Monetary policy

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Nov 02 Feb 03 May 03 Aug 032.0

3.0

4.0

5.0

6.0

7.0

8.0

Source: Norges Bank

Chart 1.16 Strategy intervals for the sight deposit rate and actual developments. Nov 02 - Oct 03

Interval in Strategy Document 1/03

Sight deposit rate



Chart 1.17 Interest rate expectations in the euro area. Actual developments and expected key rate1). Daily figures

0

2

4

6

1999 2000 2001 2002 2003 2004 20050

2

4

6

Key rate

24 Oct 02

12 Sept 03

1 July 02

19 June 03

1) Based on Euribor futures adjusted for the estimated spread between 3-month Euribor and Refi rates

Source: Norges Bank

Chart 1.18 Interest rate expectations in the US. Actual developments and expected key rate1). Daily figures

0

2

4

6

1999 2000 2001 2002 2003 2004 20050

2

4

6

1 July 02

Key rate24 Oct 02

12 Sept 03

19 June 03

1) Based on Fed Funds futures and Eurodollar futures adjusted for the estimated spread between 3-month Libor and Fed Funds rates

Source: Norges Bank

Chart 1.19 Projections for CPI-ATE in IR 2/03 based on different interest rate and exchange rate assumptions.12-month rise. Per cent

0

1

2

3

4

2001 2002 2003 2004 20050

1

2

3

4

CPI-ATE


Forward interest rate and forward

exchange rate

Interest rate of 4% and exchange rate 3/6-19/6, I-44= 93.5

Forward interest rate and forward exchange rate without impact on wage growth

Chapter 2

Chart 2.1 GDP growth in the US, Japan, the euro area and among Norway's trading partners combined. Quarterly growth. Per cent. Seasonally adjusted

-2

-1

0

1

2

-2

-1

0

1

2

2001 2002 2003

US Japan

Euro area Trading partners

Sources: EcoWin, US Department of Commerce, ESRI (JP), EURO-OP/ Eurostat and Norges Bank

Chart 2.2 Historical and expected key rates as at 23 October 20031) Daily figures

0

2

4

6

1999 2000 2001 2002 2003 20040

2

4

6

1) See further details on calculation of interest rate expectations in Charts 1.17 and 1.18

Sources: EcoWin, Bloomberg, Bank of England, Bank of Japan and Norges Bank

UK

Euro area

US

Japan

Chart 2.3 Yield spread between bonds from US enterprises with a low credit rating and US government bonds. Daily figures. Percentage points

0

2

4

6

8

10

12

2001 2002 20030

2

4

6

8

10

12

Sources: Standard & Poor’s and EcoWin

Chart 2.4 Employment. 12-month growth. Per cent. Jan 97. - Sept 03. Seasonally adjusted.

-3

-1

1

3

1997 1999 2001 2003-3

-1

1

3

Sources: EcoWin, Bureau of Labor Statistics (US), Federal Statistical Office (DE), ONS (UK) and SCB (S)

SwedenUS

UK

Germany

Chart 2.5 Exchange rates. Euro per USD and yen per USD. Daily figures. 1 Jan 99 - 23. Oct 03

0,7

0,9

1,1

1,3

1999 2000 2001 2002 200395

105

115

125

135

Source: EcoWin

EUR/USD (right-hand

scale)

YEN/USD (left-hand

scale)

Chart 2.6 GDP growth in China, Malaysia and Japan. Growth on same quarter previous year. Per cent

-4

-20

24

68

1012

14

2001 2002 2003

China Japan Malaysia

Sources: EcoWin, National Bureau of Statistics (China), ESRI (JP), Bank Negara (MAL) and Consensus Economics

Chart 2.7 Oil price Brent Blend. USD per barrel. Daily figures. 1999 - 2006.

0

10

20

30

40

1999 2000 2001 2002 2003 2004 20050

10

20

30

40

Sources: Telerate, International Petroleum Exchange and Norges Bank

Futures prices23 Oct 2003

IR 3/03

Chart 2.8 OPEC-101) production and quotas. Million barrels per day. Monthly figures. Jan 97 - Dec 03

20

22

24

26

28

30

1997 1998 1999 2000 2001 2002 200320

22

24

26

28

30

OPEC-10 quotas

OPEC-10 production

1) OPEC except Iraq

Source: International Energy Agency

Chart 2.9 Historical consumer price inflation and projections from Norges Bank. Annual percentage rise. 1995 - 2006.

-2

0

2

4

1995 1997 1999 2001 2003 2005-2

0

2

4

Sources: EcoWin, Bureau of Labor Statistics (US), Ministry of Public Management, Home Affairs, Posts and Telecommunications (JP), EUR-OP Eurostat and Norges Bank

Trading partners

Euro areaUS

Japan

Chapter 3

-4

-2

0

2

4

-4

-2

0

2

4

1990 1994 1998 2002 2006

Chart 3.1 The output gap in Norway and among trading partners. Annual figures. 1990 - 2006

Sources: OECD, Statistics Norway and Norges Bank

Trading partners

Norway

0

2

4

6

8

10

2001 2002 2003 2004 2005 20060

2

4

6

8

10

Chart 3.2 Assumption for the money market rate. Forward rate1) 2). Per cent

1) 3-month money market rate to end-September 2003. Three-month forward rates are estimated using four money market rates and five government bond yields with different maturities as observed on 23 October.2) The money market rate is normally about ¼ percentage point higher than the sight deposit rate.Source: Norges Bank

Forward rate23 October

3-month money market rate

Chart 3.3 Assumption for the krone exchange rate (I-44). Forward rate. Index1).

80

90

100

110

2001 2002 2003 2004 2005 200680

90

100

110

1)A rising curve denotes a weaker krone exchange rate

Source: Norges Bank

Forward rate 23 October

Import-weighted exchange rate, I-44

Chart 3.4 Consumer confidence indicator1). Unadjusted figures. 1999 Q1 – 2003 Q3

-30

-15

0

15

30

45

1999 2000 2001 2002 2003-30

-15

0

15

30

45

Total

Personal financial situation

Country's economic situation

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

Source: TNS Gallup

Chart 3.5 Credit from domestic sources (C2). 12-month rise. Jan 00 - Aug 03.

0

5

10

15

20

1998 1999 2000 2001 2002 20030

5

10

15

20

Credit tonon-financial enterprises

Total domestic credit

Source: Norges Bank

Credit to households

Chart 3.6 Prices for aluminium and salmon. Index. Week 1 in 2000=100. Weekly figures. Jan 00 - Oct 03

50

75

100

125

2000 2001 2002 200350

75

100

125

Salmon

Sources: Statistics Norway, EcoWin and Norges Bank

Aluminium

Chart 3.7 Investment intentions survey in August. Petroleum activities. Assumed and actual investment. In billions of NOK. 1997 - 2003

0

20

40

60

80

1997 1999 2001 20030

20

40

60

80

Source: Statistics Norway

Actual investment

Assumed and actual investment

Chart 3.8 Gross investment as a share of value added. Annual figures. 1985 - 2006.

0.00

0.05

0.10

0.15

0.20

0.25

1985 1990 1995 2000 20050.00

0.05

0.10

0.15

0.20

0.25


Services and distributive trades

Average last 10 yearsManufacturing

and construction

Chart 3.9 Unemployment1) and rental prices for commercial property2). Annual figures. 1990 – 20033).

0

1

2

3

4

5

6

7

1990 1992 1994 1996 1998 2000 20020

400

800

1200

1600

2000

2400Rental prices (right-hand scale)

Unemployment (left-hand scale)

1) Registered unemployment in Oslo. Per cent of labour force2) Rental prices office premises in Oslo, high standard, centrally located. NOK per square metre per year3) For 2003 average unemployment in 1st half year. Rental prices for commercial property according to annual survey in June.

Sources: Directorate of Labour, Dagens Næringsliv and OPAC

50

100

150

200

1995 1997 1999 2001 200350

100

150

200

1) Rental prices for commercial property in Oslo, houses whole country.2) For 2003: House prices in 1st half year. Rental prices for commercial property according to annual survey in June.

Sources: Statistics Norway and OPAC

Chart 3.10 Prices for commercial property and houses.1)

Index. 1995=100. Annual figures. 1995 - 2003.2)

Commercial property

Houses

Chart 3.11 Underlying spending growth in the government budget and nominal growth in mainland GDP. Growth on previous year. Per cent. 1990 - 2004

0

2

4

6

8

10

0

2

4

6

8

10

1990 1992 1994 1996 1998 2000 2002 2004

Sources: Ministry of Finance and Statistics Norway

Underlying spending growth

Nominal growth in mainland GDP

Chart 3.12 Change in structural non-oil budget balance1). 1990 - 2004

-3

-2

-1

0

1

2

3

-3

-2

-1

0

1

2

3

1990 1992 1994 1996 1998 2000 2002 20041) The budget balance as a percentage of trend mainland GDP. Change on previous year.

Source: The Ministry of Finance

Chart 3.13 Real underlying spending growth in the central government budget. Growth on previous year. 1990 - 2004

-3

-1

1

3

5

7

-3

-1

1

3

5

7

1990 1992 1994 1996 1998 2000 2002 2004

Sources: Ministry of Finance and Statistics Norway

Deflated by price inflation for mainland GDP

Deflated by price inflation for government budget spending

Chart 3.14 Number of job vacancies advertised per business day. Jan 00 - Sept 03 03. Seasonally adjusted

0

300

600

900

1200

2000 2001 2002 20030

300

600

900

1200

Source: Directorate of Labour

Chart 3.15 Change in employment on previous year. Per cent. Unemployment1) as a percentage of the labour force. 1980 - 2006.

0

2

4

6

8

1980 1985 1990 1995 2000 2005-4

-2

0

2

4

1) LFS unemployment.


LFS unemployment(left-hand scale)

Employed(right-hand scale)

Chapter 4

0

2

4

6

8

10

2001 2002 2003 2004 2005 20060

2

4

6

8

10

Chart 4.1 Assumption for the money market rate. Forward rate1) 2). Per cent

1) 3-month money market rates to end-September 2003. Three-month forward rates are estimated using four money market rates and five government bond yields with different maturities as observed on 23 October.2) The money market rate is normally about ¼ percentage point higher than the sight deposit rate.Source: Norges Bank



Chart 4.2 Assumption for the krone exchange rate (I-44). Forward rate. Index1)

80

90

100

110

2001 2002 2003 2004 2005 200680

90

100

110

1)A rising curve denotes a weaker krone exchange rate

Source: Norges Bank



Chart 4.3 Projections for the CPI-ATE and the output gap1). Per cent

-2

-1

0

1

2

3

2002 2003 2004 2005 2006-2

-1

0

1

2

3

1) The output gap is a measure of the difference between actual and trend output. See box in IR 1/03


CPI-ATE

Output gap

Chart 4.4 Estimated effects of historical exchange rate movements on rise in prices for imported consumer goods. Contribution in percentage points to 4-quarter rise (blue line). Historical rise in prices for imported consumer goods (red column)

-5

-4

-3

-2

-1

0

1

2

-5

-4

-3

-2

-1

0

1

2

2001 2002 2003 2004 2005 2006


0

1

2

3

4

5

6

7

0 2 4 6 80

1

2

3

4

5

6

7

02-0300-01

98-99

96-97

94-95

Registered unemployed and persons on labour market programmes as a percentage of the labour force

Annu

al w

age

grow

th (i

ncl.

cost

s of

ad

ditio

nal v

acat

ion

days

)

Chart 4.5 Annual wage growth and unemployment.2-year average

04-05

Sources: TRCIS and Norges Bank

Chart 4.6 Annual wage growth1) and unemployment rate2). Per cent. Annual figures. 1993 -2006

0

2

4

6

1993 1995 1997 1999 2001 2003 20050

2

4

6

1) Average for all groups. Including costs of additional vacation days2) LFS

Sources: TRCIS, Statistics Norway and Norges Bank

Unemployment rate

Annual wage growth

Chart 4.7 Expected consumer price inflation in 5 years. Quarterly figures. 02 Q2 - 03 Q3. Per cent

0

1

2

3

4

Jun 02 Sep 02 Dec 02 Mar 03 Jun 03 Sep 030

1

2

3

4

ExpertsEmployers' organisations

Source: TNS Gallup

Employee organisations

Chart 4.8 Expected consumer price inflation in 2 years. Per cent. Quarterly figures. 02 Q2 - 03 Q3

0

1

2

3

4


1

2

3

4

Experts

Employers' organisations

Source: TNS Gallup


Chart 4.9 Expected consumer price inflation in 1 year. Per cent. Quarterly figures. 02 Q2 - 03 Q3

0

1

2

3

4


1

2

3

4

Experts

Employers' organisations

Source: TNS Gallup


Chart 4.10 CPI-ATE. Historical developments and projection. 12-month rise. Per cent

0

1

2

3

4

2001 2002 2003 2004 2005 20060

1

2

3

4


CPI-ATE

Chart 4.11 CPI-ATE. Total and by supplier sector. Historical developments and projections. 12-month rise. Per cent

-6

-4

-2

0

2

4

6

2001 2002 2003 2004 2005 2006-6

-4

-2

0

2

4

6


Goods and services produced in Norway

CPI-ATE

Imported consumer goods

-2

0

2

4

6

2001 2002 2003 2004 2005 2006-2

0

2

4

6

Chart 4.12 CPI and CPI-ATE. Historical developments and projections. 12-month rise. Per cent

CPI

CPI-ATE


Chart 4.13 Projections and uncertainty for CPI-ATE. 12-month rise. Per cent

0

1

2

3

4

5

2001 2002 2003 2004 2005 20060

1

2

3

4

5

30% 50% 70% 90%

The bands in the fan indicate different probabilities for the development of the CPI-ATE.


Chart 4.14 Trade-weighted krone exchange rate index (TWI)1) and 3-month money market rate. Monthly figures. Jan 90 - Sep. 03

0

4

8

12

16

1990 1992 1994 1996 1998 2000 2002

85

90

95

100

105

110

115

TWI (right-hand scale)

Three-month rate(left-hand scale)

1)A rising curve denotes an appreciation of the krone

Source: Norges Bank

Chart 4.15 Import-weighted exchange rate index (I-44). Actual developments, forward rate1) and uncertainty priced into options market. Monthly figures

70

80

90

100

110

1202002 2003 2004

70

80

90

100

110

120

30% 50% 70% 90%

1) Based on the forward rate differential against trading partners 23 October 2003

Source: Norges Bank

Charts for boxes and appendices

Flexible inflation targeting and indicators of pressures in the real economy

-4

-2

0

2

4

1980 1984 1988 1992 1996 2000-4

-2

0

2

4

1)GDP figures for 2003 are based on projections.


Chart 1 The output gap. Percentage deviation from trend GDP. Annual figures. 1980 - 20031)

-4

-2

0

2

4

1991 1993 1995 1997 1999 2001 2003-4

-2

0

2

4Chart 2 The output gap and the wage gap1)

Wage gap

1) Difference between rise in hourly labour costs in manufacturing in Norway and among trading partners up to 2000. Thereafter wage growth in manufacturing in excess of 4.5 per cent.

Sources: Statistics Norway, TRCIS/IMF and Norges Bank

Output gap

Imbalances in the US

Chart 1 GDP in the US, Japan and the euro area Seasonally adjusted quarterly figures. 1990-2003. Index. 1992 Q1 = 100

95

105

115

125

135

145

1992 1994 1996 1998 2000 200295

105

115

125

135

145

Sources: EcoWin, EUR-OP/Eurostat, US Department of Commerce, ESRI

Euro area

US

Japan

Chart 2 The US current account deficit in relation to western Europe, Japan, China1, Africa and Asia excluding Japan. In billions of USD. Total over last four quarters. 1990-2003.

-540

-460

-380

-300

-220

-140

-60

20

1990 1994 1998 2002-540

-460

-380

-300

-220

-140

-60

20

1) The series for China comprises only trade in goods.

Source: EcoWin / US Department of Commerce

Total

Western Europe

China Japan

Africa and Asia excluding Japan

Sources: EcoWin / US Department of Commerce, Norges Bank

Chart 3 Net lending as a percentage of nominal GDP. Seasonally adjusted quarterly figures. 1990 - 2003.

-8

-6

-4

-2

0

2

4

6

8

1990 1993 1996 1999 2002-8

-6

-4

-2

0

2

4

6

8Private sector

Public sector

Total

Chart 4 Non-residents' net purchases of US assets. Moving average over 4 quarters. 1995 - 2003. In billions of USD.

0

40

80

120

1995 1997 1999 2001 20030

40

80

120

Direct investment

Corporate bondsGovernment bonds

and short-term paper

Sources: EcoWin / US Department of Commerce, Treasury

Appendix 3: Strategy document

Chart 1a Real interest rate before tax. 1996-20031)

-4

-2

0

2

4

6

8

10

66 70 74 78 82 86 90 94 98 02-4

-2

0

2

4

6

8

10

1) Calculated using 3-month money market rates deflated by the CPI/CPI-ATE up to 2000. Deflated by 2.5 per cent from 2001. The estimate for 2003 is based on the average of interest rates over the year (the most recent observation is used for the last part of 2003).

Source: Norges Bank

Real interest rate

Average

Chart 1b Real exchange rate. 1970-20031)

-10

-5

0

5

10

15

20

70 74 78 82 86 90 94 98 02-10

-5

0

5

10

15

20

1) Figures for 2003 based on TWI in May and projections for the CPI and wages.

Source: Norges Bank

CPI

Hourly wages

Average

87

90

93

96

992002 2003 2004 2005

0

2

4

6

8

Chart 2a Scenario 1: Sight deposit rate of 5 per cent and import-weighted exchange rate (I-44) of 90.81)

1) Corresponds approximately to the average in May.

Source: Norges Bank

Krone exchange rate (I-44)(left-hand scale)

Money market rate (right-hand scale)

-2

-1

0

1

2

3

2002 2003 2004 2005-2

-1

0

1

2

3

Chart 2b Scenario 1: Sight deposit rate of 5 per cent and import-weighted exchange rate (I-44) of 90.81)

CPI-ATE

Output gap (annual figures)

1) Corresponds approximately to the average in May.

Source: Norges Bank

87

90

93

96

992002 2003 2004 2005

0

2

4

6

8

Chart 3a Scenario 2: Forward rate at end-May and gradual exchange rate depreciation (I-44) of about 5 per cent

Source: Norges Bank



-2

-1

0

1

2

3

2002 2003 2004 2005-2

-1

0

1

2

3

Chart 3b Scenario 2: Forward rate at end-May and gradual exchange rate depreciation (I-44) of about 5 per cent

Source: Norges Bank

CPI-ATE


Chart 4 CPI-ATE with 2 per cent lower interest rate and rapid depreciation of 5 per cent.

0

1

2

3

4

2001 2002 2003 2004 20050

1

2

3

4


CPI-ATE Effect of exchange rate depreciation in isolation

Full effect on the economy

87

90

93

96

992002 2003 2004 2005

0

2

4

6

8

Chart 5a Scenario 4: Sight deposit rate of 4 per cent and import-weighted krone exchange rate (I-44) of 93.51)

1) The average for 3-19 June.

Source: Norges Bank



-2

-1

0

1

2

3

2002 2003 2004 2005-2

-1

0

1

2

3

Chart 5b Scenario 4: Sight deposit rate of 4 per cent and import-weighted krone exchange rate (I-44) of 93.51)

CPI-ATE


1)The average for 3-19 June.

Source: Norges Bank

87

90

93

96

992002 2003 2004 2005

0

2

4

6

8

Chart 6a Scenario 5: Forward rate in mid-June and gradual exchange rate depreciation (I-44) of about 3 per cent

Source: Norges Bank



-2

-1

0

1

2

3

2002 2003 2004 2005-2

-1

0

1

2

3

Chart 6b Scenario 5: Forward rate in mid-June and gradual exchange rate depreciation (I-44) of about 3 per cent

Source: Norges Bank

CPI-ATE


Appendices 4 and 5

0

2

4

6

8

10

1995 1996 1997 1998 1999 2000 2001 2002 20030

2

4

6

8

10

Source: Norges Bank

Sight deposit rate


3-month money-market rate and sight deposit rate. Monthly figures. Jan 1995 - Sept 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 December 1998

Source: Norges Bank

Euro area1)

US

Japan

3-month rates in the US, the euro area and Japan. Per cent. Monthly figures. Jan 1995 - Sept 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, TWI (1990=100)

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

0

5

10

15

1997 1998 1999 2000 2001 2002 20030

5

10

15

Source: Norges Bank

Credit to households

C2

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

C3 mainland Norway

0

2

4

6

8

10

2001 2002 2003 2004 2005 20060

2

4

6

8

10

Assumptions for money market rate. Forward rate. Per cent

Source: Norges Bank



Assumptions for the krone exchange rate (I-44). Forward rate. Index

80

90

100

110

2001 2002 2003 2004 2005 200680

90

100

110

Source: Norges Bank



Documents

Charts for Inflation Report 3/2003 2 pm. Summary