Chart 1.1 GDP for trading partners. Volume. Four quarter change. Percent. Export weights Q Q4 1) 4.5

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1 Chart. GDP for trading partners. Volume. Four quarter change. Percent. Export weights. Q 9 Q )... Projection MPR /6 Projection MPR / ) Projection for Q 9 Q (broken lines). Sources: Thomson Reuters and Norges Bank

2 Chart. Unemployment rate. Seasonally adjusted. Percent. January January 6 ) US Euro area UK Sweden ) Latest observation for the UK is December. Source: Thomson Reuters

3 Chart. Economic developments in the euro area. Four quarter change in GDP. Twelve month change in manufacturing output. Percent. Purchasing Managers Index (PMI). January February 6 ) 6 6 GDP (right hand scale) Manufacturing (right hand scale) PMI (left hand scale) 7 9 ) Latest observation for GDP is Q. Latest observation for manufacturing output is December. Source: Thomson Reuters

4 Chart. US corporate investment. Four quarter change. Percent. Q Q 8 6 Corporate investment (left hand scale) Corporate investment less resource extraction (left hand scale) Investment in resource extraction (right hand scale) 6 8 Source: Thomson Reuters

5 Chart. Contribution to GDP growth in China. Percentage points Consumption Net exports Investment GDP (percent) Sources: CEIC, Thomson Reuters and Norges Bank 6

6 Chart.6 Chinese currency reserves. In billions of USD. January 99 February Level (right hand scale) Twelve month change (left hand scale) Sources: CEIC, Barclays and Norges Bank

7 Chart.7 Oil price and consumer prices among trading partners. Twelve month change. Percent. January 8 February 6 ) Oil price (left hand scale) Sweden (right hand scale) US (right hand scale) Euro area (right hand scale) UK (right hand scale) ) Latest observation for the US, the UK and Sweden is January 6. Source: Thomson Reuters 6

8 Chart.8 Crude oil and natural gas prices. USD/barrel. January December 9 ) Gas price, Norway Oil price Gas price, UK Oil futures prices, MPR /6 Gas futures prices, UK, MPR /6 Oil futures prices, MPR / Gas futures prices, UK, MPR / ) Futures prices (broken lines) for oil and UK gas are the average of futures prices in the period 7 September for MPR / and 7 March 6 for MPR /6. Sources: Thomson Reuters, Statistics Norway and Norges Bank

9 Chart.9 Oil inventories in OECD countries. Total oil inventories in number of days of consumption. ) January January Average January April July October ) Days of consumption is calculated using average demand over the next three months. The grey band shows the interval between the highest and lowest level in the period. Sources: IEA and Norges Bank

10 Chart. Supply and demand in the oil market. Million barrels per day. 9 Q 6 Q )..... Supply (right hand scale) Demand (right hand scale) Change in inventories (left hand scale) ) Projections for 6 Q 6 Q. Source: IEA

11 Chart. Yields on year government bonds. Percent. January March 6 US Germany UK Sweden Norway Jan Jul Jan Jul Jan 6 Source: Bloomberg

12 Chart. Selected equity price indices. January =. January March US Europe China Emerging markets Norway Jan Apr Jul Oct Jan 6 7 Source: Bloomberg

13 Chart. CDS indices for European banking sector. Basis points. January March 6 Subordinated debt Senior bank bonds Jan Jul Jan Jul Jan 6 Source: Bloomberg

14 Chart. Policy rates and estimated forward rates at December and March 6 ). Percent. January December 9 ) US Euro area ) UK Sweden ) Broken lines show estimated forward rates at December. Solid lines show forward rates at March 6. Forward rates are based on Overnight Index Swap (OIS) rates. ) Daily data from January and quarterly data from January 6. ) EONIA for the euro area from 6 Q. Sources: Bloomberg, Thomson Reuters and Norges Bank

15 Chart. Money market rates for trading partners. ) Percent. Q 9 Q ) MPR /6 MPR / ) For information about the aggregate for trading partner interest rates, see Norges Bank Papers /. ) Blue and orange broken lines show forward rates for March 6 and December, respectively. Sources: Thomson Reuters and Norges Bank

16 Chart.6 Oil price ) and import weighted exchange rate index (I ) ). January March I (left hand scale) Projections I MPR / Oil price (right hand scale) Jan Jul Jan Jul Jan 6 ) USD/barrel. ) A positive slope denotes a stronger krone exchange rate. Sources: Thomson Reuters and Norges Bank

17 Chart.7 Three month Nibor spread. ) Five day moving average. Percentage points. January December 9 )... Projections MPR /6 Projections MPR / ) Norges Bank estimates of the difference between three month Nibor and expected key policy rate. ) Projections for 6 Q 9 Q (broken lines). Sources: Thomson Reuters and Norges Bank

18 Chart.8 Premiums on USD Libor. Spread to expected policy rate. Percentage points. January March m Libor m Libor.6 6m Libor m Libor Jan Jul Jan Jul Jan 6 Source: Bloomberg

19 Chart.9 Average risk premiums on new and outstanding bond debt for Norwegian banks. ) ) Spread to three month Nibor. Basis points. January December 9 Risk premium, new bank bonds Risk premium, new covered bonds Risk premium, outstanding bank bonds Risk premium, outstanding covered bonds ) Indicative risk premiums up to and including March 6 are used for March 6. ) Projections from March 6 December 9 (broken lines). Sources: Stamdata, Bloomberg, DNB Markets and Norges Bank

20 Chart. Interest rates ) on loans to non financial enterprises and households ). Percent. January January 6. Enterprises Households..... Jan Jul Jan Jul Jan 6 ) Outstanding loans. ) Lending rate for households applies to total outstanding residential mortgage loans. Source: Statistics Norway

21 Chart. GDP for mainland Norway. Actual figures, baseline scenario and projections from SAM ) with fan chart. Four quarter change. Seasonally adjusted. Volume. Percent. Q 6 Q ) % % 7% 9% GDP mainland Norway MPR /6 SAM Jan Jul Jan Jul Jan 6 ) System for Averaging short term Models. ) Projections for 6 Q 6 Q (broken lines). Sources: Statistics Norway and Norges Bank

22 Chart. GDP for mainland Norway ) and Norges Bank s regional network indicator of output growth ). Four quarter change. Percent. Q 6 Q GDP mainland Norway Regional network ) Projections for 6 Q 6 Q (broken lines). ) Converted to quarterly series. Sources: Statistics Norway and Norges Bank

23 Chart. Consumer confidence and private consumption. Net values for consumer confidence. ) Four quarter change in private consumption. Percent. 99 Q 6 Q ) 8 6 TNS Gallup trend indicator (left hand scale) Private consumption (right hand scale) ) TNS Gallup expectations barometer, adjusted trend indicator. ) Last observation Q for private consumption. Sources: TNS Gallup, Opinion and Norges Bank

24 Chart. Funding costs non financial enterprises. Lending margin. Percent. Spread to three month Nibor. ) Basis points. January February 6 ).7 Lending margin enterprises (left hand scale) Premium on bonds (right hand scale) Jan Apr Jul Oct Jan Apr Jul Oct Jan 6 ) For bonds with five year maturity issued by low risk manufacturing enterprises. ) Lending margin until January 6. Sources: Statistics Norway and DNB Markets

25 Chart. Norges Bank s regional network indicator of annualised output growth past three months and expected output growth next six months. ) Percent. ) January August 6 ) 8 8 Export oriented oil services 6 Other export industry Expected growth ) New sector classification results in a break in the series for the export industry from. ) The network uses an index from to +, where indicates that production is expected to decline by percent or more annualised. Several oil service enterprises expect production to decline by more than percent in the next six months. This is not reflected in the chart due to the limitations of the index. ) Reported growth to February 6. Expected growth for February 6 August 6. Source: Norges Bank

26 Chart.6 Export of various goods and services. Seasonally adjusted. Volume. Index. Q=. Q Q Fish Basic chemicals, chemical and mineral products Basic metals Travel Engineering products 9 Q Q Q Q Q Q 9 Source: Statistics Norway

27 Chart.7 Employment by sector. Seasonally adjusted. Index. Q=. Q Q Public sector Particularly oil related sectors ) Other sectors ) The category "particularly oil related sectors" includes extraction of crude oil and natural gas, including services, and the following industrial sectors: production of metal goods, electrical equipment and machinery, shipbuilding and transport industry, repairs and installation of machinery and equipment. In Q these sectors employed 66 people, 6% of all persons employed in the Norwegian economy. Sources: Statistics Norway and Norges Bank

28 Chart.8 Number of vacancies and number of unemployed ). In s of persons. Seasonally adjusted. Q Q 9 Unemployed Vacancies ) Registered unemployed. Sources: Statistics Norway, NAV and Norges Bank

29 Chart.9 Norges Bank s regional network indicator for expected change in employment next three months. Percent. Q 6 Q Source: Norges Bank

30 Chart. Unemployment as a share of the labour force. LFS ) and NAV ). ) ) Seasonally adjusted. Percent. January 8 June 6 LFS NAV including employment schemes NAV Projections MPR /6 Projections MPR / ) Labour Force Survey. ) Norwegian Labour and Welfare Administration. ) Projections for March 6 June 6 (broken lines). ) Latest observation December for LFS. Sources: Statistics Norway, NAV and Norges Bank

31 Chart. Registered unemployment by county. Share of labour force. Seasonally adjusted. Percent. January February 6 Hordaland, Møre og Romsdal, Rogaland and Vest Agder Rest of Norway 7 9 Sources: NAV and Norges Bank

32 Chart. Capacity constraints and labour availability as reported by Norges Bank s regional network. ) Percent. January February Capacity constraints Labour supply ) Share of contacts that will have some or considerable problems accommodating an increase in demand and the share of contacts reporting that production is constrained by labour supply. Source: Norges Bank

33 Chart. CPI and CPI ATE ). Twelve month change. Percent. January June 6 ) CPI CPI ATE 6 ) CPI adjusted for tax changes and excluding energy products. ) Projections for March 6 June 6 (broken lines). Sources: Statistics Norway and Norges Bank

34 Chart. CPI ATE ) by supplier sector. Twelve month change. Percent. January June 6 ) Imported consumer goods Domestically produced goods and services ) Projections MPR /6 Projections MPR / Jan Jul Jan Jul Jan 6 ) CPI adjusted for tax changes and excluding energy products. ) Projections for March 6 June 6 (broken lines). ) Norges Bank s estimates. Sources: Statistics Norway and Norges Bank

35 Chart. Indicator of external price impulses to imported consumer goods measured in foreign currency. Annual change. Percent. 6 ) ) Projections for and 6. Source: Norges Bank.

36 Chart.6 CPI ATE ). Actual figures, baseline scenario and projections from SAM ) with fan chart. Four quarter change. Percent. Q 6 Q ).... CPI ATE MPR /6 SAM % % 7% 9% Jan Jul Jan Jul Jan ) CPI adjusted for tax changes and excluding energy products. ) System for Averaging short term Models. ) Projections for 6 Q 6 Q (broken lines). Sources: Statistics Norway and Norges Bank

37 Chart.7 Structural non oil deficit and % of the Government Pension Fund Global (GPFG). Constant 6 prices. In billions of NOK. 9 ) % of GPFG Structural non oil deficit ) Projections for 6 9. Sources: Ministry of Finance and Norges Bank

38 Chart.8 Number of asylum applications received per month. January 8 February Source: Norwegian Directorate of Immigration

39 Chart.9 Petroleum investment. Volume. Annual change. Percent. 9 ) MPR /6 MPR / ) Projections for 6 9. Sources: Statistics Norway and Norges Bank

40 Chart. Petroleum investment. Constant 6 prices. In billions of NOK. 9 ) Fields in production Field development ) Exploration Pipelines and onshore activities ) Shutdown and removal ) Projections for 6 9. Figures for are from the investment intentions survey by Statistics Norway and deflated by the price index for petroleum investment in the national accounts. The index is projected to be unchanged from to 6. ) Expenses for pipelines for the Johan Sverdrup development are included in the estimates for pipeline transport and onshore activities. Sources: Statistics Norway and Norges Bank

41 Chart. Field development. Constant 6 prices. In billions of NOK. 9 ) Projects initiated before Johan Sverdrup (phase &) Butch, Zidane, Utgard and Trestakk Snorre and Johan Castberg Maria Other new developments ) Projections for 6 9 and for the breakdown of investment in. Figures for total development investments for are from the investment intentions survey by Statistics Norway and deflated by the price index for petroleum investment in the national accounts. The projections are based on reports to the Storting, impact analysis, forecasts from the Norwegian Petroleum Directorate, investment count from Statistics Norway and current information about development investments. Expenses for pipelines for the Johan Sverdrup development are included in the estimates for pipeline transport and onshore activities. Sources: Statistics Norway and Norges Bank

42 Chart. year moving average ) and variation ) in the CPI. Annual change. Percent. 98 Variation Inflation target CPI ) The moving average is calculated years back. ) The band around the CPI is the variation in the CPI in the average period, measured by +/ one standard deviation. Sources: Statistics Norway and Norges Bank

43 Chart. Expected consumer price inflation and years ahead. ) Percent. Q 6 Q Expected inflation years ahead Expected inflation years ahead ) Average of expectations of employer/employee organisations and economists in the financial industry and academia. Sources: Epinion and Norges Bank

44 Chart. Expected output growth next six months, Norges Bank s regional network. ) Annualised. Percent August October February Construc tion Export industry Domest. oriented mfg. Oil serv. export market Oil serv. domest. market Househ. services Commerc. services Retail trade ) The network uses an index from to +, where indicates that production is expected to decline by % or more annualised. Several oil service enterprises expect production to decline by more than % in the next six months. This is not reflected in the chart due to the limitations of the index. Source: Norges Bank

45 Chart.a Projected key policy rate in the baseline scenario with fan chart. ) Percent. 8 Q 9 Q ) % % 7% 9% ) The fan charts are based on historical experience and stochastic simulations in our main macroeconomic model, NEMO. The fan chart for the key policy rate does not take into account that a lower bound for the interest rate exists. ) Projections for 6 Q 9 Q (broken line). Source: Norges Bank

46 Chart.b Projected output gap ) in the baseline scenario with fan chart. Percent. 8 Q 9 Q % % 7% 9% ) The output gap measures the percentage deviation between mainland GDP and projected potential mainland GDP. Source: Norges Bank

47 Chart.c Projected CPI in the baseline scenario with fan chart. Four quarter change. Percent. 8 Q 9 Q ) % % 7% 9% ) Projections for 6 Q 9 Q (broken line). Sources: Statistics Norway and Norges Bank

48 Chart.d Projected CPI ATE ) in the baseline scenario with fan chart. Four quarter change. Percent. 8 Q 9 Q ) % % 7% 9% ) CPI adjusted for tax changes and excluding energy products. ) Projections for 6 Q 9 Q (broken line). Sources: Statistics Norway and Norges Bank

49 Chart. GDP for mainland Norway. Annual change. Percent. 8 9 Projections MPR /6 Projections MPR / Sources: Statistics Norway and Norges Bank

50 Chart.6 Registered unemployment in percent of labour force. Seasonally adjusted. Percent. 8 Q 9 Q ). MPR /6 MPR / ) Projections for 6 Q 9 Q (broken lines). Sources: NAV, Statistics Norway and Norges Bank

51 Chart.7 Terms of trade. Seasonally adjusted. Index. 99 Q=. 99 Q Q Total Mainland Norway Sources: Statistics Norway and Norges Bank

52 Chart.8 Annual wages. Annual change. Percent ) 7 6 Real wages Consumer prices ) Nominal wages ) Projections for 6 9. ) CPI. Sources: TBU, Statistics Norway and Norges Bank

53 Chart.9 Three month money market rate differential between Norway ) and trading partners ) and import weighted exchange rate index (I ) ). 8 Q 9 Q ) I (left hand scale) Three month rate differential (right hand scale) Projections MPR /6 Projections MPR / ) Key policy rate in the baseline scenario plus premiums in the Norwegian money market. The calculations are based on the assumption that announced interest rate changes are priced into the money market. ) Forward rates for trading partners at March 6. ) A positive slope denotes a stronger krone exchange rate. ) Projections for 6 Q 9 Q (broken lines). Sources: Thomson Reuters and Norges Bank

54 Chart. Household consumption ) and real disposable income ). Annual change. Percent. 9 ) 8 8 Household consumption Household real disposable income ) Includes consumption for non profit organisations. Volume. ) Excluding dividend income. Including income for non profit organisations. Deflated by CPI. ) Projections for 6 9. Sources: Statistics Norway and Norges Bank

55 Chart. Household saving and net lending as a share of disposable income. Percent ) Saving ratio Saving ratio excl. dividend income Net lending ratio excl. dividend income ) Projections for 6 9 (broken lines). Sources: Statistics Norway and Norges Bank

56 Chart. Private investment. Annual change. Percent. 8 9 ) Corporate investment (mainland Norway) Housing investment ) Projections for 6 9. Sources: Statistics Norway and Norges Bank

57 Chart. Norwegian labour costs ) relative to trading partners labour costs. Index. 99= ) Measured in domestic currency Measured in common currency ) Hourly labour costs in manufacturing. ) Projections for 6 (broken lines). Sources: TBU, Statistics Norway and Norges Bank

58 Chart. Exports from mainland Norway and imports by Norway s trading partners. Annual change. Percent. 8 9 ) Imports by Norway s trading partners 9 Exports from mainland Norway Oil related exports from mainland Norway ) Other exports from mainland Norway ) Projections for 6 9. ) Goods and service groups in the national accounts where the oil service sector accounts for a considerable share of exports. Sources: Thomson Reuters, Statistics Norway and Norges Bank 6 6 9

59 Chart. Household debt ) and house prices. Four quarter change. Percent. Q 9 Q ) House prices Debt Projections MPR /6 Projections MPR / 7 9 ) Domestic credit to households (C). ) Projections for 6 Q 9 Q (broken lines). Sources: Statistics Norway, Eiendom Norge, Eiendomsverdi, Finn.no and Norges Bank

60 Chart.6 Household debt ratio ) and interest burden ). Percent. Q 9 Q ) 8 6 Interest burden (left hand scale) Debt ratio (right hand scale) 7 9 ) Loan debt as a percentage of disposable income adjusted for estimated reinvested dividend income for and redemption/reduction of equity capital for 6 Q Q. ) Interest expenses as a percentage of disposable income adjusted for estimated reinvested dividend income for and redemption/reduction of equity capital for 6 Q Q plus interest expenses. ) Projections for Q 9 Q (broken lines). Sources: Statistics Norway and Norges Bank

61 Chart.7 Key policy rate, three month money market rate ), interest rate on loans to households ) and foreign money market rates in the baseline scenario. Percent. 8 Q 9 Q ) 8 8 Key policy rate 7 6 Lending rate, households Money market rate Foreign money market rates ) Key policy rate in the baseline scenario plus premiums in the Norwegian money market. The calculations are based on the assumption that announced interest rate changes are priced into the money market. ) Average interest rate on all loans to households from banks and covered bond companies. ) Projections for 6 Q 9 Q (broken lines). Sources: Thomson Reuters, Statistics Norway and Norges Bank

62 Chart.8 Three month money market rate in the baseline scenario ) and estimated forward rates ). Percent. 8 Q 9 Q Money market rate in the baseline scenario, MPR /6 Money market rate in the baseline scenario, MPR / Estimated forward rates, MPR /6 Estimated forward rates, MPR / ) Key policy rate in the baseline scenario plus Norwegian money market premiums. The calculations are based on the assumption that announced interest rate changes are priced into the money market. ) Forward rates are based on money market rates and interest rate swaps. The orange and blue bands show the highest and lowest rates in the period November December and 9 February March 6, respectively. Sources: Thomson Reuters and Norges Bank

63 Chart.9 Key policy rate and interest rate developments that follow from Norges Bank s average pattern of interest rate setting. ) Percent. Q 6 Q Key policy rate in baseline scenario 9% confidence interval ) Interest rate movements are explained by developments in inflation, mainland GDP growth, wage growth and three month money market rates among trading partners, as well as the interest rate in the preceding period. The equation is estimated over the period 999 Q Q. See Norges Bank Staff Memo /8 for further discussion. Source: Norges Bank

64 Chart. Inflation ) and projected output gap in the baseline scenario. Percent. 8 Q 9 Q 6 Output gap (left hand scale) CPI ATE (right hand scale) ) CPI adjusted for tax changes and excluding energy products. Projections for 6 Q 9 Q (broken line). Sources: Statistics Norway and Norges Bank

65 Chart. Key policy rate. ) Percent. 8 Q 9 Q 6 MPR /6 MPR / ) Projections for 6 Q 9 Q. Source: Norges Bank

66 Chart. Factors behind changes in the interest rate forecast since MPR /. Cumulative contribution. Percentage points. 6 Q 8 Q Change in interest rate forecast Exchange rate Foreign demand Foreign interest rates Money market premium Wages and prices Domestic demand 6Q 6Q 7Q 7Q 8Q 8Q Source: Norges Bank

67 Chart. Total credit ) mainland Norway as a share of mainland GDP. Percent. 976 Q Q Credit/GDP Average ) Crises ) The sum of C households and C non financial enterprises for mainland Norway (all non financial enterprises pre 99). C non financial enterprises comprises C non financial enterprises and foreign debt for mainland Norway. ) Estimated based on figures from 97 Q. Sources: Statistics Norway, IMF and Norges Bank

68 Chart. Debt held by households and non financial enterprises and mainland GDP. Four quarter change. ) Percent. Q Q Nominal GDP, mainland Norway Debt, non financial enterprises (C) ) Debt, households (C) 6 8 ) Estimated based on stock of debt at the end of the quarter. ) Sum of C non financial enterprises and foreign debt for mainland Norway. Sources: Statistics Norway and Norges Bank

69 Chart. Credit to households (C). Twelve month change and annualised change in three month moving average. Percent. January January 6 Twelve month change Change in three month moving average Source: Statistics Norway

70 Chart. Change in credit demand and banks credit standards past quarter and expected change next quarter. ) Households. 7 Q Q 8 8 Change in credit demand past quarter Next quarter 6 Change in credit standards past quarter Next quarter ) Negative values denote lower demand or tighter credit standards. Source: Norges Bank 6 8

71 Chart. Lending rates ) and interest burden ). Percent. 979 Q Q Interest burden Lending rate ) Interest rate on all bank loans to households and enterprises up to. From, interest rate on all loans to households from banks and mortgage companies. ) Interest expenses as a percentage of disposable income adjusted for estimated reinvested dividend income for and redemption/reduction of equity capital 6 Q Q plus interest expenses after tax. Sources: Statistics Norway and Norges Bank

72 Chart.6 House prices. Twelve month change and seasonally adjusted monthly change. Percent. January February 6 House prices, seasonally adjusted monthly change (left hand scale) House prices, twelve month change (right hand scale) 6 Sources: Eiendom Norge, Eiendomsverdi and Finn.no

73 Chart.7 House prices relative to disposable income. Indexed. 998 Q =. 979 Q Q House prices/disposable income Average ) Crises ) Average house prices/disposable income. Estimated based on figures from 978 Q. Sources: Statistics Norway, Eiendom Norge, Eiendomsverdi, Finn.no, Norwegian Association of Real Estate Agents (NEF) and Norges Bank

74 Chart.8 Sales of existing homes and homes for sale in thousands of dwellings. Selling times in days. January February Existing home sales past months (left hand scale) Selling times, seasonally adjusted (left hand scale) Homes for sale, seasonally adjusted (right hand scale) 6 Sources: Eiendom Norge, Eiendomsverdi, Finn.no and Norges Bank

75 Chart.9 House prices in selected cities. Twelve month change. Percent. January February 6 Oslo Bergen Trondheim Stavanger Tromsø Sources: Eiendom Norge, Eiendomsverdi and Finn.no

76 Chart. Unemployment ) and twelve month house price inflation for Oslo and Rogaland county. Percent. January February 6 Unemployment, Oslo Unemployment, Rogaland House price inflation, Oslo House price inflation, Rogaland ) Registered unemployment as a share of the labour force. Sources: NAV, Eiendom Norge, Eiendomsverdi and Finn.no

77 Chart. Domestic credit (C) to Norwegian non financial enterprises from banks and mortgage companies in NOK and other currencies. Twelve month change. ) Percent. January January 6 NOK 8 Other currencies Total Jan May Sep Jan May Sep Jan 6 ) Change in stock of debt. Sources: Statistics Norway and Norges Bank

78 Chart. Changes in credit demand and banks credit standards past quarter, and expected change next quarter. ) Enterprises. 7 Q Q 8 Change in credit demand past quarter Next quarter 6 6 Change in credit standards past quarter Next quarter ) Negative values denote lower demand or tighter credit standards. Source: Norges Bank

79 Chart. Credit from selected funding sources to Norwegian non financial enterprises. Twelve month change. ) Percent. July January 6 Domestic credit from banks and mortgage companies Domestic notes and bonds Foreign credit (mainland enterprises) ) ) Estimated based on stock of debt. ) Change based on transactions. To end December. Sources: Statistics Norway and Norges Bank

80 Chart. Volume of bond issues from Norwegian registered non financial enterprises in the Norwegian bond market. In billions of NOK. January February 6 Investment grade ) High yield ), oil related High yield ), other Jan Jun Nov Apr Sep Feb Jul Dec ) Enterprises with credit rating equal to or higher than BBB. ) Enterprises with credit rating lower than BBB. Source: Stamdata

81 Chart. Debt servicing capacity ) for listed companies. ) Percent. Q Q 8 Oil service sector 7 6 Non oil service sectors All sectors ) Pre tax profit plus depreciation and amortisation for the previous four quarters as a percentage of net interest bearing debt. ) Norwegian non financial companies listed on Oslo Børs, excluding oil extraction. Norsk Hydro is excluded to end 7 Q. Sources: Bloomberg and Norges Bank

82 Chart.6 Price to book ratio ), listed companies. ) Q Q Oil service sector.... Non oil service sectors ) Market value as a percentage of book value per share. ) Norwegian non financial companies listed on Oslo Børs excluding extraction. Norsk Hydro is excluded to end 7 Q. Sources: Bloomberg and Norges Bank

83 Chart.7 Real commercial real estate prices. ) Indexed. 998 =. 98 Q Q Real commercial real estate prices Average ) Crises ) Estimated market prices for high standard office premises in central Oslo deflated by the GDP deflator for mainland Norway. ) Estimated based on figures from 98 Q. Sources: Dagens Næringsliv, OPAK, Statistics Norway and Norges Bank

84 Chart.8 Rental prices for office premises in selected cities. NOK per square metre, per year. 6 H H ) Stavanger, central Stavanger, oil Bergen Trondheim Oslo, high standard 6 8 ) For cities other than Oslo, the statistics previously comprised one rental price segment. In the latter half of, prices were divided into the segments middle standard and high standard in each area. For the series Stavanger, central and Stavanger, oil the segment high standard was continued, while middle standard was continued for Bergen and Trondheim. Sources: OPAK and Dagens Næringsliv

85 Chart.9 Required return ) for the most attractive office premises in Oslo and year swap rate. ) Percent. H H Required return year swap rate 7 9 ) The required return is based on assessments by Dagens Næringsliv s expert panel for commercial real estate. ) Semi annual swap rate is calculated as an average of daily rates. Sources: Dagens Næringsliv and Thomson Reuters

86 Chart. Risk premiums for attractive premises in selected major European cities. ) Percent. Q Q Oslo ) London Stockholm Copenhagen 6 8 ) The risk premium is the difference between the direct required rate of return in each city and the quarterly ten year swap rate in that country. The quarterly swap rate is calculated as an average of daily rates. ) For Oslo, there are some minor deviations in the direct required rate of return between this chart and Chart.9 owing to the use of different sources. Sources: CBRE and Bloomberg

87 Chart. Value of office premises. Selected cities. Index. =. 9 Oslo CBD ) Oslo central Oslo west and north 9 Bergen Trondheim Stavanger ) CBD stands for Central Business District. Source: Investment Property Databank (IPD)

88 Chart. Return on equity for Norwegian banks ). Percent. 8 Q Q Four quarter moving average Average past years 9 ) Calculated as weighted average of seven large Norwegian banks: DNB Bank, Nordea Bank Norge, SpareBank SR Bank, Sparebanken Vest, SpareBank SMN, Sparebanken Sør and SpareBank Nord Norge (excluding Sparebanken Sør to end December ). Sources: Banking groups quarterly and annual reports and Norges Bank

89 Chart. Banks ) loan losses as a share of gross lending. Percent. Annualised. 987 Q Q ) All banks and mortgage companies in Norway. Source: Norges Bank

90 Chart. Banking groups ) Common Equity Tier (CET) capital ratios. Percent. Total assets. ) In billions of NOK. At December ) Systemically important banks The largest regional savings banks Other large banks CET requirement from June 6 including a countercyclical buffer of.% CET requirement from June 6 including a countercyclical buffer of.% and a buffer for systemic importance of % 8 6 ) Banking groups with total assets in excess of NOK bn, excluding branches of foreign banks in Norway. ) Logarithmic scale. ) Calculations based on banks proposed dividends. Sources: Banking groups quarterly reports and Norges Bank

91 Chart. Banks ) wholesale funding as a share of total assets. Percent. 976 Q Q 6 Wholesale funding/total assets Average ) Crises ) All banks and covered bond mortgage companies in Norway, excluding branches and subsidiaries of foreign banks. ) Estimated based on figures from 97 Q. Source: Norges Bank

92 Chart.6 Decomposition of banks ) wholesale funding. As a percentage of total assets. 99 Q Q Notes in NOK 8 6 Deposits from credit institutions in NOK Bonds in NOK Other debt in NOK Notes in foreign currency Deposits from credit institutions in foreign currency ) Bonds in foreign currency Other debt in foreign currency ) All banks and covered bond mortgage companies in Norway excluding branches and subsidiaries of foreign banks. ) Deposits from credit institutions include deposits from central banks. Source: Norges Bank

93 Chart.7 Exposures in other countries. Share of total exposures. ),) Percent Sweden Denmark Finland UK DNB Bank Other western European countries Eastern Europe US and Canada ) Other countries Nordea Bank Norge ) Exposures are not risk-weighted. Figures at December for the DNB Bank group and December for the Nordea Bank Norge group. ) The two banks group countries differently and general categories may include countries categorised separately by the other bank. ) Nordea only reports figures for the US. Sources: The banks group annual and Pillar reports and Norges Bank

94 Chart.8a Credit gap. Total credit ) mainland Norway as a share of mainland GDP. Deviation from estimated trends. ) Percentage points. 98 Q Q year rolling average Augmented HP filter ) One sided HP filter ) Variation Crises ) The sum of C households and C non financial enterprises for mainland Norway (all non financial enterprises pre 99). C non financial enterprises comprises C non financial enterprises and foreign debt for mainland Norway. ) The trends are calculated based on figures from 97 Q. ) One sided Hodrick Prescott filter estimated on data augmented with a simple projection. Lambda =. ) One sided Hodrick Prescott filter. Lambda =. Sources: Statistics Norway, IMF and Norges Bank

95 Chart.8b House price gap. House prices relative to disposable income. Deviation from estimated trends. ) Percent. 98 Q Q Recursive average Augmented HP filter ) One sided HP filter ) Variation Crises ) The trends are calculated based on figures from 978 Q. ) One sided Hodrick Prescott filter estimated on data augmented with a simple projection. Lambda =. ) One sided Hodrick Prescott filter. Lambda =. Sources: Statistics Norway, Eiendom Norge, Norwegian Association of Real Estate Agents (NEF), Finn.no, Eiendomsverdi and Norges Bank

96 Chart.8c Commercial real estate price gap. Real commercial real estate prices ) as deviation from estimated trends. ) Percent. 98 Q Q 8 6 Recursive average Augmented HP filter ) One sided HP filter ) 8 6 Variation Crises ) Estimated market prices for high standard office premises in Oslo deflated by the GDP deflator for mainland Norway. ) The trends are calculated based on figures from 98 Q. ) One sided Hodrick Prescott filter estimated on data augmented with a simple projection. Lambda =. ) One sided Hodrick Prescott filter. Lambda =. Sources: Dagens Næringsliv, OPAK, Statistics Norway and Norges Bank

97 Chart.8d Wholesale funding gap. Banks ) wholesale funding as a share of total assets. Deviation from estimated trends. ) Percentage points. 98 Q Q year rolling average Augmented HP filter ) One sided HP filter ) Variation Crises ) All banks and covered bond mortgage companies in Norway excluding branches and subsidiaries of foreign banks. ) The trends are calculated based on figures from 97 Q. ) One sided Hodrick Prescott filter estimated on data augmented with a simple projection. Lambda =. ) One sided Hodrick Prescott filter. Lambda =. Source: Norges Bank

98 Chart.9 Estimated crisis probabilities from various model specifications. 98 Q Q Model variation ).9 Crises ) Model variation is represented by the highest and lowest crisis probability based on different model specifications and trend calculations. Source: Norges Bank

99 Chart. Reference rates for the countercyclical capital buffer under alternative trend estimates. Percent. 98 Q Q.. Buffer based on deviation from trend using augmented HP filter ) Buffer based on deviation from trend using one sided HP filter ) ) One sided Hodrick Prescott filter estimated on data augmented with a simple projection. Lambda =. ) One sided Hodrick Prescott filter. Lambda =. Sources: Statistics Norway, IMF and Norges Bank

100 Chart Private sector credit as a share of GDP. Percent. Q Q China (left hand scale) Singapore (left hand scale) 8 South Korea (left hand scale) Brazil (right hand scale) Thailand (left hand scale) Indonesia (right hand scale) Sources: BIS, Thomson Reuters and Norges Bank

101 Chart Effective nominal exchange rate in commodity exporting emerging economies. Index. ) January =. January January Brazil Russia South Africa 7 6 Jan Oct Jul Apr Jan Oct Jul Apr Jan 6 ) A falling curve denotes a weaker exchange rate. Source: BIS

102 Chart Exports to China as a share of total exports. ) Percent. Change in growth projections for 6 from MPR / to MPR /6. Percentage points Share of exports to China (left hand scale) Change in growth projections (right hand scale) 8 6 South Korea Japan Brazil Singapore Thailand Indonesia ) Data for. Sources: UN Comtrade and Norges Bank 6

103 Chart Effect on GDP growth of percentage point lower growth in emerging economies excluding China. Change in four quarter change compared with baseline scenario. Percentage points. Q 9 Q US Euro area China Japan Q Q 6Q 7Q 8Q 8Q 9Q Source: IMF Global Projection Model

104 Chart Effect on oil price of percentage point lower growth in emerging economies excluding China. Change in percent from baseline scenario. Q 9 Q Q Q 6Q 7Q 8Q 8Q 9Q Source: IMF Global Projection Model

105 Chart Oil prices, Brent Blend. Spot price and futures price with delivery in five years. USD/barrel. January March 6 ) Spot price Futures price ) For March 6 the average daily prices March are used. Source: Thomson Reuters

106 Chart Real oil price. ) 6 USD per barrel. Oil production in Saudi Arabia. Million barrels per day. Twelve month change. Percent. January 99 February 6 Oil production (left hand scale) Real oil price (right hand scale) ) Deflated by the U.S. Consumer Price Index. Sources: IEA and Thomson Reuters

107 Chart IEA main scenario for oil market balance. Million barrels per day. ) Demand, (right hand scale) Supply, (right hand scale) Stock change from previous year, (left hand scale) ) Projections from 6. Source: IEA Medium Term Oil Market Report 6 86

108 Chart Projected output gap. ) Level. Percent ) The output gap measures the percentage deviation between mainland GDP and projected potential mainland GDP. Source: Norges Bank

109 Chart Phases of the business cycle. Economic activity Turning point Economic activity Expansion Recession Expansion Recession Time

110 Chart Norwegian recession periods ), GDP for mainland Norway (in billions of NOK at constant prices) and registered unemployment (as a percentage of the labour force). Seasonally adjusted. 978 Q Q GDP (l.h.s.) Unemployment rate (r.h.s.) Recession periods Q 98Q 987Q 99Q 997Q Q 6Q Q ) Dated in Aastveit, Jore and Ravazzolo (6). Sources: NAV, Statistics Norway and Norges Bank

111 Chart Recession probabilities estimated in real time with monthly indicator model. Percent. January 978 January 6 Recession probability 9 Recession periods ) Jan 78 Oct 8 Jul 87 Apr 9 Jan 97 Oct Jul 6 Apr Jan 6 ) Dated in Aastveit, Jore and Ravazzolo (6). Source: Norges Bank

112 Chart Three month money market rate. Percent. January March 6.. Euro area Denmark Switzerland Sweden Jan Apr Jul Oct Jan 6 Source: Thomson Reuters

113 Chart Household deposit rates. ) Percent. January January 6.. Euro area Sweden Switzerland ) Deposit rates for new agreements. For Sweden the series includes all maturities. For the euro area and Switzerland the series include sight deposits. For Switzerland the series includes other sectors in addition to households. Sources: Statistics Sweden, ECB and SNB

114 Chart Three month money market rates and lending rates for households ) and enterprises ). Percentage points. Change from month when the policy rate became negative ) Money market rate Lending rate for enterprises Lending rate for households Sweden Denmark Euro area Switzerland ) New mortgage loans from banks and credit institutions. For Switzerland the series is for fixed rate mortgages (loan sector not specified) ) New loans to enterprises from banks (including credit institutions for the euro area). For Switzerland the series is for fixed rate investment loans. ) Latest observation: December for money market rates and December for lending rates (November for Switzerland). Sources: Thomson Reuters, Statistics Sweden, Danmarks Nationalbank, SNB and ECB.8