Norges Bank

1

Executive Board meeting16 March 2006

Norges Bank

2

Growth projections GDP growth. Per cent

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

Projections IR 3/05 Projections IR 1/06

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

Projections IR 3/05 Projections IR 1/06

Source: Norges Bank

2006 2007

Norges Bank

3

CPI/HICP core1)

12-month change. January 2002 – January 2006

-2

0

2

4

2002 2003 2004 2005 2006

-2

0

2

4

US

Japan

Euro area

UK

Source: EcoWin\ Eurostat

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

Sweden

Norges Bank

4

Actual and expected key rates1)

0

1

2

3

4

5

Aug-03 Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09

0

1

2

3

4

5

Sources: Reuters and Norges Bank

US

Euro area

14 March 2006

24 January 2006

Sweden

UK

1)Not adjusted for credit risk

Norges Bank

5

Yields on 10-year government bonds. 2 January 2004 –14 March 2006

0

2

4

6

8

2004 2005 2006

0

2

4

6

8

Germany

US

Japan

Sources: Norges Bank and EcoWin

Norway

Norges Bank

6

Developments on stock markets internationally 2 January 2002 = 100. 2. January 2002 –14 March 2006

0

50

100

150

200

250

2002 2003 2004 2005 2006

0

50

100

150

200

250Wilshire 5000, USAFTSE, UKDAX, GermanyTopic, JapanOslo Stock Exchange, all-share

Source: EcoWin

Norges Bank

7

0

10

20

30

40

50

60

70

2002 2003 2004 2005 2006 2007 2008

0

10

20

30

40

50

60

70

Oil price Brent Blend and futures prices USD per barrel. 3 January 2002 –14 March 2006

14 March 2006

Sources: Telerate, IPE and Norges Bank

27 October IR 3/05

Norges Bank

8

20

30

40

50

60

70

80

2004 2005 2006

20

30

40

50

60

70

80

Oil futures pricesUSD per barrel light crude. 3 January 2004 –14 March 2006

Delivery in 6 years

Delivery in 1 month

Source: EcoWin/ NYMEX

Norges Bank

9

US commercial crude oil stocksIn million barrels

250

270

290

310

330

350

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

250

270

290

310

330

350Highest and lowest values 2000-2004

2004

2005

2006

Source: EIA

500

520

540

560

580

600

620

640

660

680

700

720

1999 2000 2001 2002 2003 2004 2005 2006

Strategic reserves

Full capacity

Norges Bank

10

Natural gas pricesUSD per 1000 Sm3. Monthly and quarterly figures.

January 2003 – February 2006

0

200

400

600

2003 2004 2005 2006

0

200

400

600

Sources: EcoWin, ICE, NYMEX, Statistics Norway, Statoil, Norsk Hydro and Norges Bank

Norwegian export price

USA

UK

Average Statoil and

Hydro

Norges Bank

11

3-month interest rate differential and import-weighted exchange rate (I-44) 1)

January 2002 – December 2008

-1

0

1

2

3

4

5

2002 2003 2004 2005 2006 2007 2008

85

88

91

94

97

100

103

Sources: Bloomberg and Norges Bank

I-442), (right-hand scale)

Weighted 3-month interest rate differential (left-hand scale)

14 March 200624 January 2006

27 October 2005

1) A rising curve denotes a stronger krone exchange rate2)The last observation is the average for 1 - 15 March 2006.

Norges Bank

12

CPI-ATE 1)

Total and by supplier sector2). Actual inflation and projections from IR 3/05. 12-month change. Per cent. January 2004 - February 2006

-4

-3

-2

-1

0

1

2

3

4

2004 2005 2006

-4

-3

-2

-1

0

1

2

3

4

Sources: Statistics Norway and Norges Bank

Goods and services produced in Norway

CPI-ATE

Imported consumer goods

1)A further adjustment is made for the estimated effect of reduced maximum day-care rates from January 2006. 2) Norges Bank's calculations

Norges Bank

13

Indicators of underlying inflation12-month change. Per cent. January 2002 – February 2006

-2

0

2

4

6

2002 2003 2004 2005 2006

-2

0

2

4

6

Source: Statistics Norway

Weighted median

CPI-ATE1)

Trimmed mean

1)A further adjustment is made for the estimated effect of reduced maximum day-care rates from January 2006.

CPI

Norges Bank

14

Number of unemployed (LFS), registered unemployed and persons on labour market programmes

In thousands. Seasonally adjusted

50

75

100

125

150

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

50

75

100

125

150

LFS unemployment

Registered unemployed and on labour market programmes

Registered unemployed

Sources: Statistics Norway and the Directorate of Labour

Norges Bank

15

Annual wage growth Per cent. 1996 – 2005

0

2

4

6

8

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

0

2

4

6

8

Source: Technical Reporting Committee on Income Settlements

Commercial and savings banksManufacturing white

collar workers

Construction

Manufacturing employees

Hotel and restaurant

Norges Bank

16

-30

-20

-10

0

10

20

30

40

1999 2000 2001 2002 2003 2004 2005 2006

-30

-20

-10

0

10

20

30

40

Total

Source: TNS Gallup and Norges Bank

Household trend indicator Unadjusted figures. 99 Q1 – 06 Q1

Own financial situation

Norwegian economy

Norges Bank

17

House prices Percentage change on same month previous year.

January 1998 – February 2006

-5

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005 2006

-5

0

5

10

15

20

25

Source: Associations of Norwegian real estate agents (NEF, EFF)

Norges Bank

18

Housing startsArea in 1000 m². Seasonally adjusted and trend.

January 2000 – January 2006

150

200

250

300

350

400

2000 2001 2002 2003 2004 2005 2006

150

200

250

300

350

400

Source: Statistics Norway

Seasonally adjusted

Trend

Norges Bank

19

Commercial building startsArea in 1000 m². January 2001 – December 2005

100

200

300

400

2001 2002 2003 2004 2005 2006

100

200

300

400

Source: Statistics Norway

Seasonally adjusted

3-month moving average

Norges Bank

20

Credit growthTotal debt mainland Norway (C3). Domestic credit to households (C2).

12-month growth. Per cent

-5

0

5

10

15

20

25

30

2000 2001 2002 2003 2004 2005 2006

-5

0

5

10

15

20

25

30

Source: Norges Bank

Households (C2)

Total debt non-financial enterprises mainland Norway (C3)

Total debt mainland Norway (C3)

Norges Bank

21

Capacity utilisationShare of Norges Bank's regional network reporting that they have some or

considerable problems in accommodating an increase in demand

0

20

40

60

80

100

Total Manufac-turing Construction Retail trade Services

0

20

40

60

80

100

Mar-05 Sep-05 Jan-06

Source: Norges Bank

Norges Bank

22

0

1

2

3

4

5

6

2006 2007 2008 2009

0

1

2

3

4

5

6

Sight deposit rate in baseline scenario and market expectations regarding the sight deposit rate1)

Per cent. 06 Q1 – 09 Q4

1) Derived from estimated forward rates. The sight deposit rate was reduced by a credit risk premium and technical difference of 0.20 percentage point. The grey shaded interval shows the highest and lowest interest rates in the market's sight deposit rate scenario in the period 27 Feb – 10 Mar 06.

Source: Norges Bank

Baseline scenario

Market expectations concerning the sight deposit rate

Norges Bank

23

Baseline scenario in Inflation Report 1/06

0

1

2

3

4

5

6

7

8

2004 2005 2006 2007 2008 2009

0

1

2

3

4

5

6

7

8

70

80

90

100

110

2004 2005 2006 2007 2008 2009

70

80

90

100

110

0

1

2

3

4

2004 2005 2006 2007 2008 2009

0

1

2

3

4

Import-weighted exchange rate

CPI-ATE Output gap

Sight deposit rate

Sources: Statistics Norway and Norges Bank

-2

-1

0

1

2

3

2004 2005 2006 2007 2008 2009

-2

-1

0

1

2

3