Charts for Inflation Report 2/2004. Chapter 1. Chart 1.1 CPI-ATE 1). Total and by supplier sector 2). 12-month rise. Per cent. Jan 01 – May 04 1) CPI-ATE:

Charts for Inflation Report2/2004

Chapter 1.

Chart 1.1 CPI-ATE1). Total and by supplier sector2). 12-month rise. Per cent. Jan 01 – May 04

-6

-4

-2

0

2

4

6

2001 2002 2003 2004

-6

-4

-2

0

2

4

6

1) CPI-ATE: CPI adjusted for tax changes and excluding energy products2) Norges Bank's estimatesSources: Statistics Norway and Norges Bank

Goods and services produced in Norway

CPI-ATE

Imported consumer goods

Chart 1.2 Prices for goods and services produced in Norway1). 12-month rise. Per cent. Jan 01 – May 04

-1

0

1

2

3

4

5

6

2001 2002 2003 2004

-1

0

1

2

3

4

5

6

1) Adjusted for tax changes and excluding energy products Percentage share of CPI-ATE in brackets. Norges Bank's estimates

Sources: Statistics Norway and Norges Bank

Services produced in Norway (27)

Goods produced in Norway (27)

Chart 1.3 Employed persons according to LFS. In millions. Seasonally adjusted. Monthly figures. Jan 98 – Mar 04

2,22

2,24

2,26

2,28

2,30

1998 1999 2000 2001 2002 2003 2004

2,22

2,24

2,26

2,28

2,30

Source: Statistics Norway

Chart 1.4 Interest rate expectations. Actual developments and expected key rate1) at 24 Jun 04. 2 Jan 03 – 1 May 06

0

1

2

3

4

5

6

2003 2004 2005 20060

1

2

3

4

5

6

1) FRA and futures contracts adjusted for the estimated difference between 3-month money market rates and the key rate Sources: Bloomberg, Reuters and Norges Bank

US

Euro areaNorway

UK

3

4

5

6

jan 03 mai 03 sep 03 jan 04 mai 04

3

4

5

6

Sources: Bloomberg and Norges Bank

Chart 1.5 Yield on government bonds with 10 years’ residual maturity. Daily figures.1 Jan 03 – 24 Jun 04

Norway

Germany

US

Chart 1.6 Import-weighted exchange rate index, I-441). Daily figures. 1 Jan 04 – 24 June 04

92

94

96

98

100

102

jan 04 mar 04 mai 04 jul 04

92

94

96

98

100

102

1)A rising curve denotes a weaker krone exchange rate

Source: Norges Bank

Chapter 2.

Chart 2.1 GDP. 4-quarter growth. Per cent. 01 Q1 – 04 Q1

-4

-2

1

3

5

2001 2002 2003 2004

-4

-2

1

3

5

Japan

Sources: EcoWin, Statistics Japan, National Statistics (UK), EUR-OP/Eurostat and Bureau of Economic Analysis (US)

US

Euro area

UK

Chart 2.2 Interest rate expectations. Actual developments and expected key rate1) at 4 March and 24 June 2004. 2 Jan 03 – 1 May 06

0

1

2

3

4

5

6

2003 2004 2005 2006

0

1

2

3

4

5

6

1) FRA and futures contracts adjusted for the estimated difference between 3-month money market rates and the key rateSources: Bloomberg, Reuters and Norges Bank

UK

Euro area

US4 March24 June

Chart 2.3 Structural budget balance. Per cent of nominal GDP. Annual figures. 1995 – 20051)

-8

-6

-4

-2

0

2

1995 1997 1999 2001 2003 2005

-8

-6

-4

-2

0

2

1) Estimates for 2003 – 2005

Source: OECD

Euro area

US

Japan

Chart 2.4 Consumer prices. 12-month rise. Per cent. Jan 01 – Jun 04

0

2

4

6

jan 01 jan 02 jan 03 jan 04

0

2

4

6

Sources: EcoWin, EUR-OP/Eurostat, Federal Statistical Office (DE) and Central Statistics Office (IRL)

Ireland

Germany

PortugalEuro area

Chart 2.5 Consumer prices. 12-month rise. Per cent. Jan 01 – May 04

-1

0

1

2

3

4

jan 01 okt 01 jul 02 apr 03 jan 04

-1

0

1

2

3

4

Sources: EcoWin, Statistics Norway, Statistics Sweden, Statistics Finland and Statistics Denmark

Norway(CPI-ATE)

Finland (HICP)

Denmark (HICP)

Sweden (UND1X)

Chart 2.6 Producer prices. 12-month rise. Per cent. Jan 00 – May 04

-4

-2

0

2

4

6

jan 00 jan 01 jan 02 jan 03 jan 04

-4

-2

0

2

4

6

Sources: EcoWin, EUR-OP/Eurostat, Bureau of Labor Statistics (US), Statistics Japan, Federal Statistical Office (DE) and National Statistics (UK)

US

Japan

UK Euro area

Chart 2.7 GDP. Change on same quarter previous year1). Per cent. 01 Q1 – 04 Q1

-2

0

2

4

6

8

10

12

2001 2002 2003 2004

-2

0

2

4

6

8

10

12

China

India

1) GDP in India is measured at factor prices

Sources: EcoWin, National Bureau of Statistics (CH), Central Bank of Malaysia, Central Statistical Organisation (I) and Consensus Economics

Malaysia

1) Brent Blend

Sources: International Petroleum Exchange and Norges Bank

Chart 2.8 Oil price1) in USD per barrel. Daily figures. 1 Jan 01 – 24 Jun 04. Futures prices at 4 Mar 04 and 24 Jun 04

15

20

25

30

35

40

2001 2002 2003 2004 2005 2006

15

20

25

30

35

40

Oil price

Futures prices 4 March 04

Futures prices24 June 04

1) Average from 1 June – 24 June

Sources: London Metal Exchange, HWWA and EcoWin

Chart 2.9 Commodity prices in USD. Index. Jan 1994=100. 3-month moving average. Monthly figures. Jan 94 – Jun 041)

50

70

90

110

130

150

170

1994 1996 1998 2000 2002 2004

50

70

90

110

130

150

170Copper

Coal

Aluminium

Zinc

Chart 2.10 Wage growth. Change on same quarter previous year. Per cent. 97 Q1 – 04 Q1

0

1

2

3

4

5

6

7

1997 1999 2001 2003

0

1

2

3

4

5

6

7

Sources: Bureau of Labor Statistics (US), National Statistics (UK) and EUR-OP/Eurostat

US

UK

Euro area

Chart 2.11 Consumer price inflation. Year-on-year rise. Per cent. 1995 – 20071)

-2

0

2

4

1995 1997 1999 2001 2003 2005 2007

-2

0

2

4


Sources: OECD and Norges Bank

Norway's trading partners

Euro areaUS

Japan

Chapter 3.

0

2

4

6

8

10

2001 2002 2003 2004 2005 2006 2007

0

2

4

6

8

10

Chart 3.1 Assumption for the money market rate1). Forward interest rate2). Monthly figures. Per cent

1) The money market rate is normally about ¼ percentage point higher than the sight deposit rate2) 3-month money market rate up to May 2004. The 3-month forward rate is estimated using four money market rates and four government bond yields with different maturities as observed on 24 JuneSource: Norges Bank

Forward rate 24 June (assumption IR 2/04)

3-month money market rate

Chart 3.2 Assumption for the krone exchange rate (I-44)1). Forward exchange rates. Monthly figures

80

90

100

110

2001 2002 2003 2004 2005 2006 2007

80

90

100

110


Source: Norges Bank


Import-weighted exchange rate, I-44

1) The output gap is a measure of the difference between actual and trend mainland GDP. Difference in per cent

2) In billions of NOK. Constant 2001 prices3) Estimates for 2004 – 2007 Sources: Statistics Norway and Norges Bank

-4

-2

0

2

4

6

8

10

500

800

1100

1400

1990 1994 1998 2002 2006

Chart 3.3 Projections for the output gap1), actual GDP2) and trend GDP2). Annual figures. 1990 – 20073)

Trend GDP (right hand

scale)

Actual GDP (right-hand scale)

Output gap (left-hand scale)

Chart 3.4 Real growth in household disposable income and consumption. Annual figures. Per cent. 1990 – 20071)

0

2

4

6

8

10

1990 1993 1996 1999 2002 2005

0

2

4

6

8

10



Real income growth

Real growth in consumption

Chart 3.5 Seasonally adjusted house prices. NOK 1000 per square metre. Monthly figures. Jan 00 – May 04

12

13

14

15

16

17

18

2000 2001 2002 2003 2004

12

13

14

15

16

17

18

Sources: Norwegian Association of Real Estate Agents and Association of Real Estate Agency Firms

Chart 3.6 Growth in credit1) to households and enterprises. 12-month growth. Per cent. Jan 97 – Apr 04

-3

0

3

6

9

12

15

18

1997 1999 2001 2003

-3

0

3

6

9

12

15

18

Credit to non-financial enterprises

1) From domestic sources (C2)Source: Norges Bank

Credit to households

Chart 3.7 Investment in mainland Norway as a share of mainland GDP and LFS unemployment. Per cent. Annual figures. 1992 – 20071)

13

15

17

19

21

1992 1996 2000 2004

2.7

3.3

3.9

4.5

5.1

5.7

6.3

LFS unemployment (inverted, right-hand scale)

Investment share (left-hand scale)



Chart 3.8 Manufacturing output index. Volume. 3-month moving average. Jan 00 – Apr 04

90

94

98

102

106

110

114

2000 2001 2002 2003 2004

90

94

98

102

106

110

114

Consumer goods

Intermediate goods

Capital goods


Chart 3.9 Change in structural non-oil budget balance1). Annual figures.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 GDP for mainland Norway, change on previous year

Source: Revised National Budget 2004

Chart 3.10 Underlying spending growth in the government budget and nominal growth in mainland GDP. Year-on-year growth. Per cent. 1990 – 20041)

0

2

4

6

8

10

0

2

4

6

8

10

1990 1992 1994 1996 1998 2000 2002 2004

1) Estimates for 2004

Sources: Ministry of Finance and Statistics Norway

Underlying spending growth

Nominal growth in mainland GDP

Chart 3.11 Growth in number employed and contributions from the public sector. Annual figures. 1971 – 2003

-4

-3

-2

-1

0

1

2

3

4

-4

-3

-2

-1

0

1

2

3

4

1971 1976 1981 1986 1991 1996 2001


Employment growth, per cent

Contribution from public sector, percentage points

Chart 3.12 Change in employment on previous year, per cent. Unemployment1) as a percentage of the labour force. Annual figures. 1980 – 20072)

0

2

4

6

1980 1985 1990 1995 2000 2005-4

-2

0

2

4

1) LFS unemployment2) Estimates for 2004 – 2007


LFS unemployment(left-hand scale)

Number employed(right-hand scale)

Chart 3.13 Labour force as a percentage of population aged 16–74 (labour force participation rate). Per cent. Annual figures. 1980 – 20071)

65

67

69

71

73

75

65

67

69

71

73

75

1980 1984 1988 1992 1996 2000 2004



Labour force participation rate

Chart 3.14 Number of disability pensioners as a percentage of the population (aged 18 – 67) and number of sickness days per employee1). Annual figures. 1980 – 2003

4

6

8

10

12

14

4

6

8

10

12

14

1980 1984 1988 1992 1996 20001) Paid by the National Insurance2) Since 2000 the sick pay scheme has also applied to all central government employees. This results in a break in the series between 1999 and 2000 Source: National Insurance Administration

Disability pensioners

Sickness days2)

Chart 3.15 Developments in number of person-hours worked and the number of employed persons in mainland Norway. Annual figures. Index. 1970=100. 1970 – 2003

90

100

110

120

130

140

150

1970 1975 1980 1985 1990 1995 2000

90

100

110

120

130

140

150

Employment

Person-hours


Chapter 4.


80

90

100

110

2001 2002 2003 2004 2005 2006 2007

80

90

100

110


Source: Norges Bank



Forward rate 4 March (assumption IR 1/04)

0

2

4

6

8

10

2001 2002 2003 2004 2005 2006 2007

0

2

4

6

8

10





1) The money market rate is normally about ¼ percentage point higher than the sight deposit rate2) 3-month money market rate up to May 2004. The 3-month forward rate is estimated using four money market rates and four government bond yields with different maturities as observed on 4 March and 24 JuneSource: Norges Bank

Chart 4.3 CPI-ATE. Seasonally adjusted monthly rise. 3-month moving average, annualised. Oct 03 – Dec 041)

-3

-2

-1

0

1

2

3

nov 03 feb 04 mai 04 aug 04 nov 04

-3

-2

-1

0

1

2

3

Projections

1) Estimates from Jun 04 – Dec 04Sources: Statistics Norway and Norges Bank

Historical

Chart 4.4 CPI-ATE. Total and by supplier sector1). 12-month rise. Per cent. Jan 01 – Dec 072)

-6

-4

-2

0

2

4

6

2001 2002 2003 2004 2005 2006 2007

-6

-4

-2

0

2

4

6

1) Norges Bank's estimates2) Estimates from Jun 04 – Dec 07Sources: Statistics Norway and Norges Bank

Goods and services produced in Norway

CPI-ATE


-2

0

2

4

6

2001 2002 2003 2004 2005 2006 2007

-2

0

2

4

6

Chart 4.5 CPI and CPI-ATE. 12-month rise. Per cent. Jan 01 – Dec 071)

CPI

CPI-ATE

1) Estimates from Jun 04 – Dec 07


Chart 4.6 CPI and prices for imported consumer goods. Annual figures. Index. 1998=100. 1979 – 2003

30

45

60

75

90

105

120

1979 1983 1987 1991 1995 1999 2003

30

45

60

75

90

105

120

Consumer price index



Chart 4.7 Projected price movements for some imported consumer goods, measured in foreign currency. Quarterly figures. Index. 91 Q1=100. 91 Q1 – 04 Q1

50

60

70

80

90

100

110

1991 1993 1995 1997 1999 2001 2003

50

60

70

80

90

100

110

Sources: EcoWin and Norges Bank

Clothing and footwear

Audiovisual equipment

Chart 4.8 Indicator of external price impulses to imported consumer goods measured in foreign currency. Annual figures. 1995 – 20071)


Source: Norges Bank

-3

-2

-1

0

1

2

3

1995 1997 1999 2001 2003 2005 2007

-3

-2

-1

0

1

2

3

Chart 4.9 Prices for imported consumer goods in the CPI and in External Trade Statistics, and I-44. 4-quarter rise. Per cent. 98 Q1 – 04 Q2

-15

-10

-5

0

5

10

1998 2000 2002 2004

-15

-10

-5

0

5

10

1) Norges Bank's estimates: Clothing and accessories, footwear, furniture, food and beverages

2) Excluding audiovisual equipment and cars. Observations in April and May 2004 are used as the basis for the second quarter


I-44

Imported consumer goods in External Trade Statistics1)

Imported consumer goods in CPI2)

Chart 4.10 Contribution of the exchange rate to rise in prices for imported consumer goods. Based on historical exchange rates and the forward exchange rate in Inflation Report 1/04 and 2/04. Percentage points. Quarterly figures. 01 Q1 – 07 Q4

-3

-2

-1

0

1

2

3

2001 2002 2003 2004 2005 2006 2007

-3

-2

-1

0

1

2

3

Inflation Report 1/04

Inflation Report 2/04

Source: Norges Bank

Chart 4.11 Labour costs per produced unit1) and domestic price inflation2). Rise on same period previous year. Per cent. Jun 80 – May 04

-4

0

4

8

12

16

1980 1984 1988 1992 1996 2000 2004

-4

0

4

8

12

16

1) Labour costs in relation to gross product. Mainland Norway excl. the energy sector. 4-quarter moving average 2) Adjusted for tax changes and excluding energy products. Monthly figuresSources: Statistics Norway and Norges Bank

Labour costs per produced unit

Domestic inflation

Chart 4.12 Expected consumer price inflation in 5 years. Per cent. Quarterly figures. 02 Q2 – 04 Q2

0

1

2

3

4

jun 02 des 02 jun 03 des 03 jun 040

1

2

3

4

Experts

Employer organisations

Source: TNS Gallup

Employee organisations

Chart 4.13 Expected consumer price inflation in 2 years. Per cent. Quarterly figures. 02 Q2 – 04 Q2

0

1

2

3

4

jun 02 des 02 jun 03 des 03 jun 04

0

1

2

3

4

Experts

Employer organisations

Source: TNS Gallup

Employee organisations

Chart 4.14 Annual wage growth1) and unemployment rate2). Per cent. Annual figures. 1993 – 20073)

0

2

4

6

1993 1995 1997 1999 2001 2003 2005 2007

0

2

4

6

1) Average for all groups. Including cost of additional vacation days2) LFS3) Projections for 2004 – 2007Sources: Technical Reporting Committee on Income Settlements, Statistics Norway and Norges Bank

Unemployment rate

Annual wage growth

Chart 4.15 Growth in real consumer wages and real producer wages1). Per cent. Annual figures. 1996 –20072)

0

1

2

3

4

5

1996 1999 2002 2005

0

1

2

3

4

5

1) Consumer price inflation for goods and services produced in Norway is used as a deflator for real producer wages. The CPI is the deflator for real consumer wages2) Projections for 2004 – 2007Source: Norges Bank

Real consumer wages

Real producer wages

Chart 4.16 Projections and uncertainty for the CPI-ATE1). 12-month rise. Per cent. Jan 01 – Dec 07

-1

0

1

2

3

4

5

2001 2002 2003 2004 2005 2006 2007-1

0

1

2

3

4

530% 50% 70% 90%

1) The bands in the fan indicate different probabilities for developments in the CPI-ATE. Probabilities are based on the difference between projected and actual developments in underlying inflation in the period 1997 – 2004Sources: Statistics Norway and Norges Bank

Chart 4.17 Changes in I-44. Daily figures. 1 Mar 04 – 24 Jun 04

92

94

96

98

100

Mar 04 Apr 04 May 04 Jun 0492

94

96

98

100


Source: Norges Bank

Chapter 5

Chart 5.1 CPI. Moving 10-year average1) and variation2). 1979 – 20043). Per cent

0

2

4

6

8

10

12

14

1979 1984 1989 1994 1999 20040

2

4

6

8

10

12

14

CPI

Inflation target

1) The moving average is estimated 7 years back, current year and 2 years ahead 2) The band around the CPI is the variation in the period, measured as +/- one standard deviation 3) Figures for 2002 – 2004 are based on projectionsSources: Statistics Norway and Norges Bank

CPI1)

Inflation target

1) The output gap measures the difference between actual and trend mainland GDP 2) The band shows the variation in the output gap measured as + one standard deviation. The variation is estimated as average standard deviation in a 10-year period, 7 years back, current year and 2 years ahead


-8

-6

-4

-2

0

2

4

6

8

1980 1985 1990 1995 2000-8

-6

-4

-2

0

2

4

6

8

Chart 5.2 Projections for the output gap, level1)and variation2). 1979 – 2004. Per cent

Chart 5.3 Projections for the CPI-ATE1) and the output gap2) in Inflation Report 1/04 (red) and 2/04 (green). Per cent

-2

-1

0

1

2

3

2002 2003 2004 2005 2006 2007

-2

-1

0

1

2

3

1) CPI-ATE: CPI adjusted for tax changes and excl. energy products2) The output gap measures the difference between actual and trend mainland GDP


CPI-ATE

Output gap

IR 1/04IR 2/04

0

2

4

6

8

10

2001 2002 2003 2004 2005 2006 2007

0

2

4

6

8

10


1) The money market rate is normally about ¼ percentage point higher than the sight deposit rate2) 3-month money market rate up to May 2004. The 3-month forward rate is estimated using four money market rates and four government bond yields with different maturities as observed on 4 March and 24 JuneSource: Norges Bank





80

90

100

110

2001 2002 2003 2004 2005 2006 2007

80

90

100

110


Source: Norges Bank




0

1

2

3

4

5

6

7

8

nov 02 mar 03 jul 03 nov 03 mar 04 jul 04

0

1

2

3

4

5

6

7

8

Source: Norges Bank

Chart 5.6 Interval for the sight deposit rate at the end of each strategy period and actual developments. Daily figures. 1 Nov 02 – 1 July 04

Strategy period 1/03

Sight deposit rate





1)A rising curve denotes a stronger krone exchange rate

Source: Norges Bank

Chart 5.7 Import-weighted krone exchange rate1), sight deposit rate and 3-month interest rate differential against trading partners. Daily figures. 1 Jan 02 – 24 Jun 04

85

90

95

100

105

110

2002 2003 2004

-2

0

2

4

6

8

I-44 (left-hand scale)

Sight deposit rate (right-hand scale)

3-month interest rate differential (right-

hand scale)

1

2

3

4

5

6

2004 2005 2006 2007 2008

1

2

3

4

5

6

1) Estimated as a weighted average of the forward rates for the euro area, the US, Sweden and the UKSource: Norges Bank

Norwegian forward interest rate

Forward rate trading partners1)

Chart 5.8 Forward interest rates. Monthly figures. Per cent. Jan 04 – Dec 07

24 June4 March

Chart 5.9 Projections for CPI-ATE1) and the output gap2). Per cent

-2

-1

0

1

2

3

2002 2003 2004 2005 2006 2007

-2

-1

0

1

2

3

CPI-ATE

Output gap

1) CPI-ATE: CPI adjusted for tax changes and excluding energy products2) The output gap measures the difference between actual and trend mainland GDPSources: Statistics Norway and Norges Bank

0

2

4

6

8

10

2001 2002 2003 20040

2

4

6

8

10

3-month rate, Norway

Norwegian forward rate

Taylor rate

Chart 5.10 3-month money-market rate1), Taylor rate, forward interest rates for trading partners and Norway at 24 June. Monthly figures. Jan 01 – Dec 04

1) The money market rate is normally about ¼ percentage point higher than the sight deposit rate


Forward rates for trading partners

Charts for Inflation Report 2/2004. Chapter 1. Chart 1.1 CPI-ATE 1). Total and by supplier sector 2). 12-month rise. Per cent. Jan 01 – May 04 1) CPI-ATE:

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