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  1. Charts for Inflation Report3/20032 pm

  2. Summary

  3. Chart 1 Projections for the CPI-ATE and the output gap1).Per cent CPI-ATE Output gap 1) The output gap is a measure of the difference between actual and trend output.See box in IR 1/03. Sources:Statistics Norway and Norges Bank

  4. 30% 50% 70% 90% Chart 2 Projections and uncertainty for the CPI-ATE. 12-month rise. Per cent The bands in the fan indicate different probabilities for the CPI-ATE. Sources: Statistics Norway and Norges Bank

  5. Chapter 1

  6. 1.1 The economic situation

  7. Chart 1.1 Real interest rate after tax1) 1985 Q1 – 2003 Q3. 3-month rate 5-year rate 1) 3-month money market rates deflated by the CPI excluding energy products up to 1995, Norges Bank's estimates for the CPI adjusted for tax changes and excluding energy products from June 1995 to July 2000, then the CPI-ATE.The same deflator is used for 5-year government bond yields, but from 2001 Q2 the inflation target of 2.5 per cent is used. Sources:Statistics Norway and Norges Bank

  8. Chart 1.2 The output gap.Percentage deviation from trend GDP. Annual figures. 1980-2003.1) 1) GDP figures for 2003 are based on estimates. Source:Norges Bank

  9. Chart 1.3 Relative labour costs¹): Norway and trading partners2).Deviation from average 1970 - 2002.Per cent. Annual figures. 1970 - 20033) Local currency Common currency 1) Hourly labour costs in manufacturing 2) Estimates for 2003.For relative labour costs in common currency, the projection for 2003 is based on a continuation of the average exchange rate in October (at 23 October) for the remainder of the year. 3)Wage growth for 2003 is based on projections. Sources: TRCIS, Ministry of Finance and Norges Bank

  10. Chart 1.4 Employed persons according to the LFS.In millions, Jan 98 – Jul 03. Seasonally adjusted Source:Statistics Norway

  11. 1.2 Consumer price inflation

  12. Chart 1.5 CPI-ATE.Total1) and by supplier sector.2)12-month rise. Per cent. Jan 99. - Sept 03 Goods and services produced in Norway CPI-ATE Imported consumer goods 1) Norges Bank's estimates up to and including July 2000, thereafter figures published by Statistics Norway 2) Norges Bank's estimates Sources:Statistics Norway and Norges Bank

  13. Chart 1.6 Prices for some imported consumer goods adjusted for tax changes. 12-month rise. Per cent. Jan 01 - Sept 03. Cars (9) Audio-visual equipment (3) Clothing and footwear (7) Percentage share of CPI-ATE in brackets Sources:Statistics Norway and Norges Bank

  14. Chart 1.7 Prices for some imported consumer goods adjusted for tax changes. Index. 1990=100.Annual figures. 1990 - 2002. Footwear Domestic appliances Clothing Audio-visual equipment Sources:Statistics Norway and Norges Bank

  15. Chart 1.8 Goods and services produced in Norway in the CPI-ATE. 12-month rise. Per cent.Jan01 - Sept 03. Services with wages as a dominant factor (7) House rent (18) Other services (21) Consumer goods produced in Norway excluding energy products1) (18) 1) Excluding agricultural and fish products Percentage share of CPI-ATE in brackets Sources:Statistics Norway and Norges Bank

  16. Chart 1.9 Consumer prices.Total and adjusted for tax changes and excluding energy products.12-month rise. Per cent. Jan 99. - Sept 03. CPI-AT1) CPI CPI-ATE1) CPI-AT:CPI adjusted for tax changesCPI-ATE:CPI adjusted for tax changes and excluding energy products 1) Norges Bank's estimates up to and including July 2000, thereafter figures published by Statistics Norway Sources:Statistics Norway and Norges Bank

  17. Chart 1.10 Electricity prices. Index. 1 January 1998=100 Spot price including tax and grid rental Electricity in the CPI Sources:Statistics Norway, Nordpool, the Norwegian Water Resources and Energy Directorate and Norges Bank

  18. 1.3 Financial markets

  19. Chart 1.11 Movements in the Oslo Stock Exchange OSEBX index, 5-year government bond yields in Norway and the US. Daily figures. 1 Jun02 - 23 Oct 03 5-year gov't bond yields Norway (right-hand scale) 5-year gov't bond yields US (right-hand scale) OSEBX (left-hand scale) Sources:EcoWin and Norges Bank

  20. Actual Forward Chart 1.12 Three-month money market rates and forward rates. Monthly figures, 1995-2013. Norway Trading partners Difference Source:Norges Bank

  21. Chart 1.13 Import-weighted exchange rate (I-44), trade-weighted exchange rate index1) and interest rate differential against other countries. Jan 95 - 23 Oct. 03. 3-month nterest rate differential (left-hand scale) I-44 (right-hand scale) TWI (right-hand scale) 1)A risng curve denotes an appreciation of the krone Source:Norges Bank

  22. Chart 1.14 The krone exchange rate against EUR and USD1).Weekly figures. 12 Jan 02 - 23 Oct 03 NOK/USD NOK/EUR 1)A risng curve denotes an appreciation of the krone Source:Norges Bank

  23. Chart 1.15 Import-weighted exchange rate (I-44)1) and sight deposit rate. Daily figures. 2 Jan 01 - 23 Oct 03 Sight deposit rate (left-hand scale) I-44 (right-hand scale) 1)A risng curve denotes an appreciation of the krone Source:Norges Bank

  24. 1.4 Monetary policy

  25. Chart 1.16 Strategy intervals for the sight deposit rate and actual developments. Nov 02 - Oct 03 Interval in Strategy Document 3/02 Sight deposit rate Interval in Strategy Document 1/03 Interval in Strategy Document 2/03 Source:Norges Bank

  26. Chart 1.17 Interest rate expectations in the euro area.Actual developments and expected key rate1).Daily figures Key rate 1 July 02 24 Oct 02 12 Sept 03 19 June 03 1) Based on Euribor futures adjusted for the estimated spread between 3-month Euribor and Refi rates Source:Norges Bank

  27. Chart 1.18 Interest rate expectations in the US.Actual developments and expected key rate1).Daily figures 1 July 02 Key rate 24 Oct 02 12 Sept 03 19 June 03 1) Based on Fed Funds futures and Eurodollar futures adjusted for the estimated spread between 3-month Libor and Fed Funds rates Source:Norges Bank

  28. Chart 1.19Projections for CPI-ATE in IR 2/03 based on different interest rate and exchange rate assumptions.12-month rise. Per cent Forward interest rate and forward exchange rate without impact on wage growth Forward interest rate and forward exchange rate CPI-ATE Interest rate of 4% and exchange rate 3/6-19/6, I-44= 93.5 Sources:Statistics Norway and Norges Bank

  29. Chapter 2

  30. Chart 2.1 GDP growth in the US, Japan, the euro area and among Norway's trading partners combined. Quarterly growth. Per cent. Seasonally adjusted Sources: EcoWin, US Department of Commerce, ESRI (JP), EURO-OP/ Eurostat and Norges Bank

  31. Chart 2.2 Historical and expected key rates as at 23 October 20031)Daily figures UK Euro area US Japan 1) See further details on calculation of interest rate expectations in Charts1.17 and 1.18 Sources:EcoWin, Bloomberg, Bank of England, Bank of Japan and Norges Bank

  32. Chart 2.3 Yield spread between bonds from US enterprises with a low credit rating and US government bonds. Daily figures. Percentage points Sources:Standard & Poor’s and EcoWin

  33. Chart 2.4 Employment. 12-month growth. Per cent. Jan 97. - Sept 03. Seasonally adjusted. US Sweden UK Germany Sources:EcoWin, Bureau of Labor Statistics (US), Federal Statistical Office (DE), ONS (UK) and SCB (S)

  34. Chart 2.5 Exchange rates.Euro per USD and yen per USD. Daily figures. 1 Jan 99 - 23. Oct 03 EUR/USD (right-hand scale) YEN/USD (left-hand scale) Source:EcoWin

  35. Chart 2.6 GDP growth in China, Malaysia and Japan.Growth on same quarter previous year. Per cent Sources:EcoWin, National Bureau of Statistics (China), ESRI (JP), Bank Negara (MAL) and Consensus Economics

  36. Chart 2.7 Oil price Brent Blend.USD per barrel. Daily figures. 1999 - 2006. IR 3/03 Futures prices 23 Oct 2003 Sources:Telerate, International Petroleum Exchange and Norges Bank

  37. Chart 2.8 OPEC-101) production and quotas.Million barrels per day. Monthly figures. Jan 97 - Dec 03 OPEC-10 production OPEC-10 quotas 1) OPEC except Iraq Source:International Energy Agency

  38. Chart 2.9 Historical consumer price inflation and projections from Norges Bank.Annual percentage rise. 1995 - 2006. Euro area US Trading partners Japan Sources:EcoWin, Bureau of Labor Statistics (US), Ministry of Public Management, Home Affairs, Posts and Telecommunications (JP), EUR-OP Eurostat and Norges Bank

  39. Chapter 3

  40. Chart 3.1 The output gap in Norway and among trading partners. Annual figures. 1990 - 2006 Norway Trading partners Sources:OECD, Statistics Norway and Norges Bank

  41. Chart 3.2 Assumption for the money market rate.Forward rate1)2).Per cent 3-month money market rate Forward rate 23 October 1) 3-month money market rate to end-September 2003.Three-month forward rates are estimated using four money market rates and five government bond yields with different maturities as observed on 23 October. 2) The money market rate is normally about ¼ percentage point higher than the sight deposit rate. Source:Norges Bank

  42. Chart 3.3 Assumption for the krone exchange rate (I-44).Forward rate.Index1). Import-weighted exchange rate, I-44 Forward rate 23 October 1)A rising curve denotes a weaker krone exchange rate Source:Norges Bank

  43. Chart 3.4 Consumer confidence indicator1).Unadjusted figures. 1999 Q1 – 2003 Q3 Personal financial situation Total Country's economic situation 1) Indicates the share with a positive assessment of the current situation and outlook for the future less the share with a negative assessment. Source:TNS Gallup

  44. Chart 3.5 Credit from domestic sources (C2).12-month rise. Jan 00 - Aug 03. Credit to households Total domestic credit Credit to non-financial enterprises Source:Norges Bank

  45. Chart 3.6 Prices for aluminium and salmon. Index. Week 1 in 2000=100.Weekly figures. Jan 00 - Oct 03 Aluminium Salmon Sources:Statistics Norway, EcoWin and Norges Bank

  46. Chart 3.7 Investment intentions survey in August.Petroleum activities. Assumed and actual investment.In billions of NOK. 1997 - 2003 Actual investment Assumed and actual investment Source:Statistics Norway

  47. Chart 3.8 Gross investment as a share of value added. Annual figures. 1985 - 2006. Services and distributive trades Average last 10 years Manufacturing and construction Sources:Statistics Norway and Norges Bank

  48. Chart 3.9 Unemployment1) and rental prices for commercial property2).Annual figures. 1990 – 20033). Rental prices (right-hand scale) Unemployment (left-hand scale) 1) Registered unemployment in Oslo. Per cent of labour force 2) Rental prices office premises in Oslo, high standard, centrally located. NOK per square metre per year 3) For 2003 average unemployment in 1st half year.Rental prices for commercial property according to annual survey in June. Sources: Directorate of Labour, Dagens Næringsliv and OPAC

  49. Chart 3.10 Prices for commercial property and houses.1) Index. 1995=100. Annual figures. 1995 - 2003.2) Houses Commercial property 1) Rental prices for commercial property in Oslo, houses whole country. 2) For 2003:House prices in 1st half year.Rental prices for commercial property according to annual survey in June. Sources:Statistics Norway and OPAC

  50. Chart 3.11 Underlying spending growth in the government budget and nominal growth in mainland GDP.Growth on previous year. Per cent. 1990 - 2004 Underlying spending growth Nominal growth in mainland GDP Sources:Ministry of Finance and Statistics Norway