Norges Bank 1 Economic perspectives Charts Address by Governor Svein Gjedrem at the meeting of the Supervisory Council of Norges Bank on Thursday, 14 February.

Norges Bank

1

Economic perspectives Charts

Address by Governor Svein Gjedrem at the meeting of the Supervisory Council of Norges

Bank on Thursday, 14 February 2008

Norges Bank

2

The US housing marketPrice changes

Source: Reuters (EcoWin)

-6

0

6

12

18

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

-6

0

6

12

18

Norges Bank

3Photo: AFP/SCANPIX

Norges Bank

4

80

90

100

110

120

Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08

80

90

100

110

120

Equity pricesIndices, 1 January 2007 = 100

Source: Reuters (EcoWin)

US

Norway

Europe

4

Norges Bank

5

Interest rate premia in the money marketPercentage points

0

0.2

0.4

0.6

0.8

1

1.2

Jun-07 Aug-07 Oct-07 Dec-07 Feb-08

0

0.2

0.4

0.6

0.8

1

1.2

Norway

Sources: Bloomberg, Reuters (EcoWin) and Norges Bank

USEuro area

Norges Bank

6

Real interest rate and saving ratio in the USPer cent

-3

0

3

6

9

12

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

-3

0

3

6

9

12

Source: Reuters (EcoWin)

Saving ratio

Long-term real interest rate

Norges Bank

7

-9

-6

-3

0

3

6

9

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

-9

-6

-3

0

3

6

9

US real interest rate and current account deficitPer cent

Sources: Reuters (EcoWin) and IMF

Current account deficit(per cent of GDP)

Long-term real interest rate

Norges Bank

8

Current account surplusIn billions of USD

-100

0

100

200

300

400

500

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

-100

0

100

200

300

400

500

Source: IMF

Japan

Oil exporters

China

Norges Bank

9

Norway - current account balance, basic balance and household financial saving

In billions of NOK

-200

-100

0

100

200

300

400

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

-200

-100

0

100

200

300

400

Sources: Statistics Norway Ministry of Finance and Norges Bank

1) The figure for 2007 is the sum of 2006 Q4 through 2007 Q3.

Current account balance

Basic balance

Household financial saving1)

Norges Bank

10

Regional house prices 12-month rise. Per cent

-10

0

10

20

30

2006 2007 2008

-10

0

10

20

30

Rogaland

Hedmark

Whole of Norway

Sources: Norwegian Association of Real Estate Agents, Association of Real Estate Agency Firms, FINN.no, ECON Pöyry, Statistics Norway and Norges Bank

Norges Bank

11

InflationCPI. 3-year moving average. Per cent

0

2

4

6

8

10

12

14

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

0

2

4

6

8

10

12

14

Sources: Statistics Norway and Norges Bank

Inflation target

Norges Bank

12

Norges Bank’s key policy ratePer cent

Source: Norges Bank

0

2

4

6

8

2000 2001 2002 2003 2004 2005 2006 2007 2008

0

2

4

6

8

Norges Bank

13

Krone exchange rate and interest rate differentialIndex and per cent

85

88

91

94

97

100

103

106

2000 2001 2002 2003 2004 2005 2006 2007 2008

-2

-1

0

1

2

3

4

5

Sources: Reuters and Norges Bank

Krone exchange rate1)

(left-hand scale)Interest rate differential

(right-hand scale)

1) A rising curve denotes an appreciation of the krone

Norges Bank

14

-10

10

30

50

1970 1980 1990 2000

0

5

10

15

20

25

30

35

40

2004 2005 2006 2007

Romania

Latvia

Estland

Litauen

Polen

Registered employed from new EU countries

In thousands

Population growth and net inward migration

In thousands

Population growth

Net inward migration

Sources: Statistics Norway and the Central Office - Foreign Tax Affairs

Norges Bank

15

Change in employmentIn thousands

-80

-40

0

40

80

120

-80

-40

0

40

80

120

1975 1980 1985 1990 1995 2000 2005

Sources: Statistics Norway and Norges Bank

Norges Bank

16

Productivity growthPer cent

-2

-1

0

1

2

3

4

5

1980 1985 1990 1995 2000 2005

-2

-1

0

1

2

3

4

5

Sources: Statistics Norway and Norges Bank

Average 1980s

Average 1990-2007

Norges Bank

17

Terms of tradeIndex

70

100

130

160

190

1995 1997 1999 2001 2003 2005 2007

70

100

130

160

190

Mainland Norway

Norway incl. oil

Sources: Reuters (EcoWin), Statistics Finland and Statistics Norway

Sweden

Finland

Norges Bank

18

Real krone exchange rateIndex. Average 1970 – 2007 = 100

85

90

95

100

105

110

115

1975 1980 1985 1990 1995 2000 2005

85

90

95

100

105

110

115

Sources: Statistics Norway, Ministry of Finance and Norges Bank

Average

Norges Bank

19

Real wage growth and wage shareIndex and per cent

80

90

100

110

120

130

140

150

160

1990 1992 1994 1996 1998 2000 2002 2004 2006

60

62

64

66

68

70

72

74

76

Sources: Statistics Norway and the Technical Reporting Committee on Income Settlements

Real wage growth(right-hand scale)

Wage share (left-hand scale)

Norges Bank

20

Wage differential in OECD countries in 2005Ninth decile/first decile

0

1

2

3

4

5

Norway

Sweden

Finlan

d

Denm

ark

Japa

n

Franc

e

Germ

any

UK

Irelan

d

Polen

US

0

1

2

3

4

5

Source: OECD

Norges Bank

21

Share of persons with low incomePer cent

0

5

10

15

20

25

Norway Sweden Denmark France Germany Italy Ireland0

5

10

15

20

25

Source: Statistics Norway

EU average

Norges Bank

22

Income in selected countries in 2006Adjusted for purchasing power. In thousands of EUR

0

5

10

15

20

Polen EU

Sweden

Franc

e

Germ

any

Denm

ark

UK

Norway

0

5

10

15

20

Source: Eurostat

Norwegian low income threshold

Norges Bank

23

Share of persons in Norway with low income1994 threshold. Per cent

0

3

6

9

12

15

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

0

3

6

9

12

15

Source: Statistics Norway

Norges Bank

24

Government Pension Fund – GlobalIn billions of NOK

0

400

800

1200

1600

2000

2400

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20070

400

800

1200

1600

2000

2400

Source: Norges Bank

Norges Bank

25

Pension obligations and the Government Pension Fund

Per cent of mainland GDP

0

50

100

150

200

250

300

350

400

2005 2015 2025 2035 2045 2055

0

50

100

150

200

250

300

350

400

The National Insurance Scheme's old age pension obligations

Government Pension Fund

Source: Norges Bank

Norges Bank

26

Large sovereign-wealth funds and foreign exchange reserves

In billions of USD

0 500 1000 1500 2000

China

United Arab Emirates

Singapore

Russia

Norway

Saudi Arabia

Kuwait

Algeria

Libya

Qatar

Sources: Morgan Stanley Research and IMF