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Norges Bank 11 Executive Board meeting 13 March 2008.

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Presentation on theme: "Norges Bank 11 Executive Board meeting 13 March 2008."— Presentation transcript:

1 Norges Bank 11 Executive Board meeting 13 March 2008

2 Norges Bank 22 Source: Statistics Norway Weighted median CPI-ATE 20 per cent trimmed mean CPI Various inflation indicators 12-month change. Per cent. January 2002 – February 2008

3 Norges Bank 3 Domestically produced goods and services (0.7) Imported consumer goods (0.3) CPI-ATE Sources: Statistics Norway and Norges Bank CPI-ATE 1) Total and broken down into imported and domestically produced goods and services 2). Projections from MPR 3/07 (broken lines). 12-month change. Per cent 1) CPI adjusted for tax changes and excluding energy products. 2) Norges Bank's calculations.

4 Norges Bank 4 Contributions to change in 12-month rise in the CPI-ATE 1) since February 2007 Percentage points. February 2007 – February 2008 Sources: Statistics Norway and Norges Bank 1) CPI adjusted for tax changes and excluding energy products.

5 Norges Bank 5 CPI-ATE 1) Total and by supplier sector 2). 12-month change. Per cent. January 2002 – December 2011 Sources: Statistics Norway and Norges Bank 1) CPI adjusted for tax changes and excluding energy products. 2) Norges Bank's calculations. Goods and services produced in Norway (0.7) Imported consumer goods (0.3) CPI-ATE

6 Norges Bank 6 Expected consumer price inflation 2 and 5 years ahead 1) Per cent. 02 Q2 –08 Q1 Expected inflation 2 years ahead Expected inflation 5 years ahead 1) Average of expectations of employer/employee organisations and experts (financial industry employees, macroanalysts and academics) Source: TNS Gallup

7 Norges Bank 7 Norges Bank's regional network: Capacity constraints Per cent. January 2005 – January 2008 1) Share reporting that they would have some or considerable difficulty in accommodating an increase in demand. 2) Share who respond that the supply of labour will be a limiting factor for output/turnover. Capacity 1) Labour 2) Source: Norges Bank

8 Norges Bank 8 Oil price (Brent Blend). Spot and futures prices In USD per barrel Sources: Reuters (EcoWin) and Norges Bank 11 March 2008 25 October 2007 (MPR 3/07)

9 Norges Bank 99 International commodity prices in SDR Index, 2000 = 100. Week 1 2000 – Week 10 2008 Sources: Reuters (EcoWin), The Economist and Norges Bank Non-food agriculturals Food Industrials All items Metals

10 Norges Bank 10 Source: Reuters (EcoWin) US (S&P 500) Japan (Nikkei) Emerging market economies (MSCI) Norway (OSEBX) Europe (STOXX) Equities Indices, 1 January 2007 = 100. 1 January 2007 – 12 March 2008 10

11 Norges Bank 11 Difference between three-month money market rates and expected key rates 1) In percentage points. Historic (from 1 June 2007) and ahead (at 12 March 2008) Norway 2) US UK Euro area Sources: Bloomberg, Reuters (EcoWin) and Norges Bank 1) The expected key rate is measured by the Overnight Indexed Swap (OIS). 2) Norges Bank’s estimates.

12 Norges Bank 12 Sources: Reuters and Norges Bank Key policy rates and forward rates 23 January and 12 March 2008 Norway US Euro area 12 March 2008 After previous monetary policy meeting (23 January 2008) UK

13 Norges Bank 13 Sources: Reuters and Norges Bank I-44 (right-hand scale) Weighted interest rate differential (left-hand scale) 23 January 2008 12 March 2008 1) A rising curve denotes an appreciation of the krone. 3-month interest rate differential and import-weighted exchange rate (I-44) 1) January 2002 – December 2011 MPR 1/08 12 March 2008

14 Norges Bank 14 Sources: Reuters and Norges Bank Market 12 March 2008 Key policy rate in the baseline scenario and estimated forward rates 1) Per cent I) A credit risk premium and a technical difference of 0.20 percentage point have been deducted to ensure comparability with the key policy rate. 14 Market 23 January 2007 Baseline scenario MPR 1/08

15 Norges Bank 15 Sources: Statistics Norway and Norges Bank The baseline scenarios in MPR 3/07 and MPR 1/08 with fan charts from MPR 1/08. Per cent Output gap CPI-ATE CPI 90% 70% 50% 30% Key policy rate MPR 1/08 MPR 3/07 MPR 1/08 MPR 3/07 MPR 1/08 MPR 3/07 MPR 1/08

16 Norges Bank 16 Key policy rate Source: Norges Bank Strategy interval 1/05 3/04 2/05 3/05 1/06 2/06 3/06 2/07 1/07 3/07 MPR 1/08 MPR 3/07 1/08


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