Norges Bank

1

Monetary Policy Meeting2 November 2005

Norges Bank

2

Growth forecasts from Consensus Forecasts

0

1

2

3

4

5

6

7

World NorthAmerica

WesternEurope

Japan Asiaexcl.

Japan

EasternEurope

LatinAmerica

Forecasts June Forecasts October

0

1

2

3

4

5

6

7

World NorthAmerica

WesternEurope

Japan Asiaexcl.

Japan

EasternEurope

LatinAmerica

Forecasts June Forecasts October

Source: Consensus Forecasts

2005 2006

Norges Bank

3

CPI/HICP1)

12-month change. Per cent. January 2002 – September 2005

0.0

1.0

2.0

3.0

4.0

5.0

2002 2003 2004 2005

0.0

1.0

2.0

3.0

4.0

5.0US

Sweden2)1 Harmonised index of consumer prices2) UND1X

Euro area

UK

Source: EcoWin

Norges Bank

4

Product and crude oil pricesIndex, 2 January 2002 = 100. 1 January 2004 – 31 October 2005

100

150

200

250

300

350

400

450

Jan 04 Jul 04 Jan 05 Jul 05

100

150

200

250

300

350

400

450

Crude oil

Jet fuel

Sources: NYMEX and IPE

Unleaded petrol

Norges Bank

5

CPI core1)

12-month change. January 1999 – September 2005

-1,0

0,0

1,0

2,0

3,0

4,0

1999 2001 2003 2005

-1,0

0,0

1,0

2,0

3,0

4,0

US

Sweden

Euro area

UK

1) US: CPI excl. food and energy Euro area, UK and Sweden: CPI excl. energy, food, alcohol and tobacco

Source: EcoWin

Norges Bank

6

Actual and expected key rates for the US, the euro area, the UK and Sweden

0

1

2

3

4

5

Jun 03 Dec 03 Jun 04 Dec 04 Jun 05 Dec 05 Jun 06 Dec 06 Jun 07

0

1

2

3

4

5

Sources: Reuters and Norges Bank

US

Euro area

31 October

20 September

Sweden

UK

Norges Bank

7

Developments in 10-year government bond yieldsPer cent. 3 January 2005 – 31 October 2005

3

3.5

4

4.5

5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct

3

3.5

4

4.5

5

Germany

Norway

US

Source: EcoWin

Norges Bank

8

90

100

110

120

130

140

150

Jan 05 Mar 05 May 05 Jul 05 Sep 05

90

100

110

120

130

140

150Norway, OSEBX

USA, S&P

Japan, Topix

Eurozone, STOXX

Developments in international equity indicesTotal return. Indexed, 3 January 2005 = 100.

3 January 2005 – 31 October 2005

Source: EcoWin

Norges Bank

9

Developments in equity sub-indices, Oslo Stock ExchangeTotal return. Indexed, 3 January 2005 = 100.

3 January 2005 – 31 October 2005

75

100

125

150

175

200

Jan 05 Mar 05 May 05 Jul 05 Sep 05

75

100

125

150

175

200Oslo Stock Exchange total

Energy

Manufacturing**

Finance

IT*

** Calculated as the average of the industrials and materials indices

Source: EcoWin

*Calculated as the average of the IT and telecom indices.

Norges Bank

10

Oil futures pricesUSD per barrel light crude. 2 January 2001 – 31 October 2005

10

20

30

40

50

60

70

80

2001 2002 2003 2004 200510

20

30

40

50

60

70

80

Delivery in 6-7 years

Delivery in 1 month

Source: EcoWin/ NYMEX

Norges Bank

11

CPI and CPI-ATE1)

12-month change. Per cent. January 2002 – September 2005

-3

-2

-1

0

1

2

3

4

5

6

2002 2003 2004 2005

-3

-2

-1

0

1

2

3

4

5

6

1) CPI-ATE: CPI adjusted for tax changes and excluding energy products

CPI

CPI-ATE

Source: Statistics Norway

Norges Bank

12

CPI-ATE12-month change. Per cent. December 2003 – September 2005.

(Broken line: projections IR 2/05)

-5

-4

-3

-2

-1

0

1

2

3

Dec 03 Mar 04 Jun 04 Sep 04 Dec 04 Mar 05 Jun 05 Sep 05

-5

-4

-3

-2

-1

0

1

2

3

Sources: Statistics Norway and Norges Bank

Goods and services produced in Norway (0.7)1)

1) Norges Bank's calculations

Imported consumer goods (0.3)

CPI-ATE

Norges Bank

13

3-month interest rate differential and import-weighted exchange rate (I-44)*

January 2002 – October 2005

-1

0

1

2

3

4

5

2002 2003 2004 2005 2006

85

88

91

94

97

100

103

Sources: Bloomberg and Norges Bank

I-44 (right-hand scale)

Weighted 3-month interest rate differential

(left-hand scale)20 September 2005

31 October 2005

* A rising curve denotes a stronger krone exchange rate

Norges Bank

14

Macroeconomists’ interest rate projections

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

End-2005 In 12 months

Handelsbanken First Fokus

Pareto Nordea SEB

DnB NOR Terra Market

Sources: Reuters and Norges Bank

Norges Bank

15

UnemployedIn thousands. Seasonally adjusted. January 2001 – October 2005

50

75

100

125

2001 2002 2003 2004 2005

50

75

100

125LFS unemploymentRegistered unemployed and

on labour market programs

Registered unemployed

Sources: Statistics Norway and the Directorate of Labour

Norges Bank

16

Business tendency surveyBusiness climate index

Seasonally differentiated diffusion index. 1997 Q1 - 2005 Q3

Source: Statistics Norway

-10

-5

0

5

10

15

20

1997 1998 1999 2000 2001 2002 2003 2004 2005

-10

-5

0

5

10

15

20

Norges Bank

17

1) Projections for 2005 ― 2008

Changes in house pricesPer cent. 1992 ― 20081)

-10

-6

-2

2

6

10

14

18

1992 1996 2000 2004 2008

-10

-6

-2

2

6

10

14

18

Sources: Norwegian Association of Real Estate Agents, Association of Real Estate Agency Firms, Finn.no, ECON and Norges Bank

Norges Bank

18

Credit to households1) and enterprises2)

12-month growth. Per cent. January 2002 – September 2005

-3

0

3

6

9

12

15

18

2002 2003 2004 2005

-3

0

3

6

9

12

15

18

Non-financial enterprises mainland Norway

1) From domestic sources (C2)2)Total credit to non-financial enterprises mainland Norway (C3)

Households

Source: Norges Bank

Norges Bank

19

Underlying spending growth in the government budget and nominal growth in mainland GDP

Growth on previous year. Per cent. 1985-20061)

0

3

6

9

12

15

0

3

6

9

12

15

1985 1988 1991 1994 1997 2000 2003 2006

1) Projections for 2005 and 2006 from the Ministry of Finance

Underlying spending growth

Nominal growth in mainland GDP

Sources: Ministry of Finance (National Budget 2006) and Statistics Norway

Norges Bank

20

0

1

2

3

4

2004 2005 2006 2007 2008

0

1

2

3

4

-2

-1

0

1

2

2004 2005 2006 2007 2008

-2

-1

0

1

2

70

80

90

100

110

2004 2005 2006 2007 2008

70

80

90

100

110

Baseline scenario in Inflation Report 3/05

Import-weighted exchange rate

CPI-ATE Output gap

0

1

2

3

4

5

6

7

8

2004 2005 2006 2007 2008

0

1

2

3

4

5

6

7

8

Sight deposit rate