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EXECUTIVE BOARD MEETING
24 OCTOBER 2018
BASED ON INFORMATION IN THE PERIOD TO 22 OCTOBER 2018
Monetary Policy Report 3/18, overall picture
-1
0
1
2
3
-1
0
1
2
3
2012 2014 2016 2018 2020
2
-3-2-1012
-3-2-1012
2012 2014 2016 2018 2020
0
1
2
3
4
0
1
2
3
4
2012 2014 2016 2018 2020859095100105110
859095
100105110
2012 2014 2016 2018 2020
Output gap Key policy rate
Inflation (CPI-ATE) Exchange rate index (I-44)
Sources: Statistics Norway and Norges Bank
3
45
50
55
60
45
50
55
60
2010 2011 2012 2013 2014 2015 2016 2017 2018
Manufacturing PMI
Services PMI
Manufacturing and services PMI. 25 main trading partners. Export weights. January 2010 – September 2018
Source: Thomson Reuters
PMI for Norway’s trading partners
Global growth
4 Sources: IMF and Norges Bank
Historical average and projections from the IMF. Percent. 2016 – 2019
3.9
3.7
3
3.2
3.4
3.6
3.8
4
3
3.2
3.4
3.6
3.8
4
2016 2017 2018-19
World Economic Outlook, AprilWorld Economic Outlook, OctoberAverage 2009 - 2017
Inflation for selected trading partners
5
Twelve-month change. Percent. January 2010 – September 2018 Core inflation Headline CPI
-1
0
1
2
3
4
5
-1
0
1
2
3
4
5
2010 2012 2014 2016 2018
USEuro areaUKSweden
-1
0
1
2
3
4
5
-1
0
1
2
3
4
5
2010 2012 2014 2016 2018
USEuro areaUKSweden
Source: Thomson Reuters
Policy rates
6
Policy rates and estimated forward rates1). Percent. January 2011 – December 2021
1) Forward rates are based on Overnight Index Swap (OIS) rates. Daily data through 22 October 2018. Quarterly data from 2019 Q1. Sources: Bloomberg, Thomson Reuters and Norges Bank
-1
-0.5
0
0.5
1
1.5
2
2.5
3
-1
-0.5
0
0.5
1
1.5
2
2.5
3
2011 2013 2015 2017 2019 2021
USUKEuro areaSweden22 OctoberMPR 3/18
Three-month money market rates for Norway’s trading partners
7
Percent. 2012 Q1 – 2021 Q4
Sources: Thomson Reuters and Norges Bank
0
0.5
1
1.5
2
0
0.5
1
1.5
2
2012 2014 2016 2018 2020
MPR 3/18
22 October
Global equity markets
8
Index. 1 January 2016 = 100. 1 January 2016 – 22 October 2018
60
80
100
120
140
160
180
60
80
100
120
140
160
180
2016 2017 2018
Emerging economiesUSChinaEuropeUK
MPR 3/18
Sources: Bloomberg and Norges Bank
Crude oil spot and futures prices
9
USD/barrel. Daily data. January 2010 – December 20211)
1) Futures prices are the average of futures prices for the period 16 October – 22 October 2018 (yellow broken line) and the period 10 September – 14 September 2018 (blue broke line). Sources: Thomson Reuters and Norges Bank
0
20
40
60
80
100
120
140
0
20
40
60
80
100
120
140
2010 2012 2014 2016 2018 2020
Spot pricesFutures pricesFutures prices MPR 3/18
MPR 3/18
10
2 January 2014 – 22 October 2018. Projection to 2018 Q4 Import-weighted exchange rate index (I-44)
Source: Norges Bank
90
95
100
105
110
90
95
100
105
110
2014 2015 2016 2017 2018
I-44
Projection MPR 3/18
Average to date 2018 Q4
MPR 3/18
Stronger NOK
Three-month money market premium
11
Percentage points. 1 January 2016 – 22 October 2018. Projection to 2018 Q4
Source: Norges Bank
0
0.2
0.4
0.6
0.8
1
0
0.2
0.4
0.6
0.8
1
Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18
Norwegian money market premiumProjection MPR 3/18Average to date 2018 Q4
MPR 3/18
Lending rates
12
Change from previous quarter1). 2018 Q2 – 2018 Q4
1) 2/1 = Up a lot/a little, 0 = Approx. unchanged, -1/-2 = Down a little/a lot. Source: Norges Bank’s Survey of Bank Lending
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
Q2 Q3 Q4 Q2 Q3 Q4-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
Reported developments Expected developments
Households Non-financial enterprises
GDP mainland Norway
13
Monthly and three-month growth. Seasonally adjusted. Percent. February 2016 – August 2018
Source: Statistics Norway
-3
-2
-1
0
1
2
3
-1
-0.5
0
0.5
1
Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 Aug-18
Monthly growth (l.h.s)
Three-month growth (r.h.s)
14 Source: Statistics Norway
-2
-1
0
1
2
-2
-1
0
1
2
Jun-16 Dec-16 Jun-17 Dec-17 Jun-18
Total consumptionServices consumptionGoods consumption
Private consumption for households and non-profit organisations. Three-month growth. Seasonally adjusted. Percent. June 2016 – August 2018
Private consumption
Business tendency survey for manufacturing, mining and quarrying
15
Expected output growth. Seasonally adjusted diffusion index. 1990 Q1 – 2018 Q3
Source: Statistics Norway
30
35
40
45
50
55
60
65
70
30
35
40
45
50
55
60
65
70
1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
Mining and quarrying
Average since 1990
House prices
16
Percent. January 2015 – September 2018
Sources: Eiendomsverdi, Finn.no and Real Estate Norway
2015 2016 2017 2018-10
-5
0
5
10
15
-2
-1
0
1
2
3
Seasonally adjusted monthly change (l.h.s.)Twelve-month change (r.h.s.)
Fiscal policy
17
Structural non-oil deficit and 3% of the GPFG1). Share of trend GDP for mainland Norway. Percent. 2008 – 20212)
1) Global Pension Fund Global. 2) Projections for 2018 – 2021 (broken line and shaded bars). Sources: Ministry of Finance and Norges Bank
0
2
4
6
8
10
0
2
4
6
8
10
2008 2010 2012 2014 2016 2018 2020
Structural non-oil deficitNational Budget 2019MPR 3/183% of the GPFG in NB19
Unemployment
18
As a percentage of the labour force. Seasonally adjusted. January 2012 – September/July 2018. Projections to December/October 2018
0
1
2
3
4
5
6
0
1
2
3
4
5
6
2012 2013 2014 2015 2016 2017 2018
NAV unemploymentLFS unemploymentProjections MPR 3/18
Sources: Norwegian Labour and Welfare Administration (NAV) and Statistics Norway
Inflation
19
Twelve-month change. Percent. January 2012 – September 2018. Projections to December 2018
0
1
2
3
4
5
0
1
2
3
4
5
2012 2013 2014 2015 2016 2017 2018
CPICPI-ATEProjections MPR 3/18
Sources: Statistics Norway and Norges Bank
SAM1) forecasts for the CPI-ATE
20 1) System for Averaging short-term Models. Sources: Statistics Norway and Norges Bank
Four-quarter change. Percent. 2014 Q1 – 2018 Q2. Projections to 2018 Q4
0
1
2
3
4
0
1
2
3
4
2014 2015 2016 2017 2018
CPI-ATE
Projection MPR 3/18
SAM MPR 3/18
SAM 19 October
EXECUTIVE BOARD MEETING
24 OCTOBER 2018
BASED ON INFORMATION IN THE PERIOD TO 22 OCTOBER 2018
