Outlook for the Norwegian business sector and the role of Norges Bank Central Bank Governor Svein Gjedrem Kongsvinger, March Effective exchange rates 199=1 1 1 11 NOK 11 1 GBP 1 9 8 NZD 9 8 7 SEK 7 199 199 199 199 1998 Source: EcoWin
Equity prices and long-term interest rates in the US Index Per cent 1 1 1 9 8 Standard & Poor s (left-hand scale) 1-year rates (right-hand scale) 199 199 199 199 1998 Source: EcoWin Krone exchange rate and the interest rate differential Per cent Index 9 Interest rate differential (left-hand scale) 9 1 1 Krone exchange rate, TWI (right-hand scale) 1 11 1999 1 11 Source: Norges Bank
Krone exchange rate and US equity prices 11 1 1 1 1 Krone exchange rate (left-hand scale) 11 9 Equity prices (right-hand scale) 9 9 1999 1 7 Sources: EcoWin and Norges Bank Relative labour costs Deviation from historical average. Per cent 1 1 January 1 1 1 - -1 Common currency - -1-1 197 197 198 198 199 199-1 Sources: TRCIS/IMF, Ministry of Finance and Norges Bank
Relative labour costs 1 1 1 January 11 11 1 Local currency 1 9 Common currency 9 8 199 199 199 199 1998 8 Sources: TRCIS/IMF, Ministry of Finance and Norges Bank Cyclical divergence Short-term interest rates in the US and Norway 1 1 8 Norway 8 US 199 199 1997 1998 1999 1 Source: EcoWin
The real interest rate Per cent 1 8 - Average 1 8 - - 19 197 197 1978 198 198 199 199 1998 - Sources: Statistics Norway and Norges Bank Relationships in monetary policy Exchange rate Imported price inflation Norges Bank s interest rates Consumer price inflation Consumption Investment Employment Output Wages and margins
Unemployment Per cent 9 8 7 Registered plus labour market programmes LFS unemployment 9 8 7 1 Average 199s 199 199 199 199 1998 1 Sources: Public Employment Service, Statistics Norway and Norges Bank Wage shares Labour costs as a percentage of factor income 1 1 9 9 8 Manufacturing 8 7 7 Other mainland industries 199 199 199 199 1997 1998 1999 1 Sources: TRCIS og Statistics Norway
GDP growth abroad Percentage change from previous year.,, (IR /)* (IR 1/)* 1, 1, US Japan Euro area Trading partners Source: Norges Bank *) Projections at different times Change in employment from previous year Unemployment 1) as a percentage of the labour force. 198-8 7 Employed (right-hand scale) 1-1 - 1 Unemployment rate (left-hand scale) 1) Registered unemployed 198 198 1988 199 199 - - Source: Statistics Norway, Public Employment Service and Norges Bank
Unemployment Percentage of the labour force. February Norway Akershus S. og Fjord Oppland Buskerud Hedmark Troms Vestfold M. og Rogaland Østfold Hordaland Nordland S. Trøndelag N.Trøndelag Telemark Oslo V. Agder A. Agder Finnmark Source: Public Employment Service 1 Change in unemployment by occupational category 1) Dec. 1- Dec. (blue), Jan. Jan. (green) and Feb. Feb. (red) Manufacturing Sales Other services Construction Administration Science-related Health and care Commercial Teaching Transport Agric., forestry and fish. -1 1 1) In addition the item "specified / no occupational background" has risen by 7 persons. Source: Public Employment Service
Employment by industry Hedmark and country as a whole Percentage of total employment (1) Country as a whole Hedmark 1 Public admin. and other services Source: Statistics Norway Retail trade, Manuf. hotel and etc. restaurant Constru ction Agric., forestry, fish. Commer cial serv. Transport, communic ations Financ. serv. Electricit y, gas and water supply Exports of traditional goods Per cent of total exports of traditional goods. January Finnmark Troms N. Trøndelag A. Agder Hedmark S. Trøndelag Akershus Oppland Oslo Nordland Buskerud Østfold Telemark S. og Fjord Vestfold M. og Romsd V. Agder Rogaland Hordaland Source: Statistics Norway 8 1 1
Industrial confidence indicator. Seasonally adjusted diffusion index 1). 1 1 1 1-1) Values below zero indicate that the majority of the industrial leaders expect weaker developments the coming three months -1 199 199 199 199 1998 - -1 Source: Statistics Norway and Norges Bank New orders. Manufacturing Value indices. 199=1. Domestic 1 1 1 Exports 1 9 9 9 9 97 98 99 1 Source: Statistics Norway
Electricity prices Index 1 January 1998 = 1 18 1 Spot prices incl. taxes and grid rental 18 1 1 Jan. Jul. Jan.1 Jul.1 Jan. Jul. Jan. *Electricity (including grid rental) accounts for approx..% of the CPI Sources: Statistics Norway, Nord Pool, Viken Energi and Norges Bank Electricity price index in the CPI* 1 Consumer confidence indicator Unadjusted figures and trend 1 Trend 1-1 Unadjusted - 199 199 199 199 199 1997 1998 1999 1-1 - Source: Norsk Gallup Institutt AS, Norwegian Savings Banks Association
Credit from domestic sources (C) and house prices 1-month rise. Per cent 1 Non-financial enterprises Households 1 1 1 House prices 1998 1999 1 Sources: Norwegian Association of Real Estate Agents, FINN.no, ECON and Norges Bank Projections for main macroeconomic aggregates Percentage change from previous year 1 18 1 1 9 - - Private consumption Public consumption Fixed investment Petroleum investment Traditional exports Source: Norges Bank
GDP - Mainland Norway Percentage change from previous year Actual Projection IR 1/ 1 199 199 199 199 1998 Source: Norges Bank Consumer prices adjusted for tax changes and excluding energy products (CPI-ATE) Total and distributed by supplier sector. 1-month rise. Per cent Goods and services produced in Norway CPI-ATE - Imported consumer goods - - 1 - Sources: Statistics Norway and Norges Bank
Norges Bank's monetary policy meeting of March Norges Bank reduced the interest rate from. per cent to. per cent. According to Norges Bank's assessment, with an interest rate of. per cent, the probability that inflation two years ahead will be lower than ½ per cent is greater than the probability that it will be higher.