Economic outlook. Address by Central Bank Governor Svein Gjedrem to invited foreign embassy representatives. Norges Bank 18 March 2004

Transcription

1 Economic outlook Address by Central Bank Governor Svein Gjedrem to invited foreign embassy representatives Norges Bank 1 March SG Diplomat 1.. Long-term interest rates Per cent Norway US Germany SG Diplomat 1.. Source: EcoWin

2 Global daily foreign exchange trade In billions of USD SG Diplomat 1.. Sources: BIS, IMF and central banks Share of global exports Per cent 1 1 US Germany Japan 1 1 China SG Diplomat 1.. Sources: IMF, EcoWin and Norges Bank

3 Imports to Norway Share. Per cent China 9 Central Europe SG Diplomat 1.. Sources: Statistics Norway and Norges Bank Petroleum production in Norway In millions of Sm o.e Oil Gas Crude oil Gas SG Diplomat 1.. Source: Ministry of Finance (Long-Term Programme -5)

4 From petroleum wealth to financial wealth Per cent of total wealth Petroleum wealth Financial wealth 1999 SG Diplomat 1.. Source: Ministry of Finance (Long-Term Programme -5) Petroleum activity in MAINLAND ECONOMY PETROLEUM ACTIVITY Government net cash flow (EUR billion) Use of petroleum revenues (EUR 5 billion) PETROLEUM FUND Export revenues oil and gas (EUR 7 billion) Interest and dividends (EUR billion) Financial investments abroad (EUR 1 billion) FOREIGN MARKETS SG Diplomat 1.. Source: Ministry of Finance (NB)

5 1 - The Petroleum Fund key figures In NOK billions Transfers Return in international currencies Effect of a change in NOK Market value at SG Diplomat 1.. Current investment strategy the benchmark index Petroleum Fund benchmark index Equities % Fixed income % Europe Americas and Asia Europe Americas Asia 5 % 5 % 55 % 5 % 1 % FTSE all-world country indices in 7 countries. Approx. companies. Lehman Global Aggregate broad fixed income index in countries. SG Diplomat 1..

6 Petroleum Fund s ownership interests in equity markets, as a percentage of market capitalisation in the FTSE indices, % Americas Europe Asia Total,5 %, %, %, %,1 %, % SG Diplomat 1.. mar 9 jun 9 sep 9 des 9 mar 99 jun 99 sep 99 des 99 mar jun sep des mar 1 jun 1 sep 1 des 1 mar jun sep des mar jun sep des Macroeconomic policy in Norway rests on two pillars The fiscal rule: Limit the use of petroleum revenues to the expected annual real return on the Fund Monetary Policy: Inflation target of ½ per cent SG Diplomat 1..

7 Mainland GDP In billions of NOK. Constant prices Trend Actual SG Diplomat 1.. Sources: Statistics Norway and Norges Bank 15 Trade-weighted exchange rate Index. 199 Week 1 = 1 a. Commodity economies b. Other economies New Zealand 15 1 Australia 1 UK 115 Norway 115 Switzerland Canada Norway Sweden SG Diplomat 1.. Sources: Bank of England and EcoWin

8 Real krone exchange rate Deviation from average. Per cent SG Diplomat 1.. International equity indices Jan. 1 = Tyskland DAX Norge OBX USA S&P 5 Japan NIKKEI 1 1 jan. mai. sep. jan. SG Diplomat 1.. Source: Bloomberg

9 Interest rate expectations in the US and in the euro area Actual developments and expected key rate. Daily figures 7 USA 7 Euro area 5 5 Dec 1. Dec 1. Oct. Oct. 1 March SG Diplomat 1.. March Source: Bloomberg, Reuters and Norges Bank Underlying inflation. Total and by supplier sector 1-month rise. Per cent. Jan Feb Goods and services produced in Norway Underlying inflation - - Imported consumer goods SG Diplomat 1.. Sources: Statistics Norway and Norges Bank

10 Price indicator for imported consumer goods Foreign currency. Percentage rise SG Diplomat 1.. Price indicator for imported consumer goods Foreign currency. Index Q1 = Other goods 1 Footwear 1 Audiovisual equipment Clothing SG Diplomat 1..

11 Import-weighted krone exchange rate and interest rate differential against trading partners Index Per cent Krone exchange rate (left-hand scale) Interest rate differential (righthand scale) SG Diplomat Real growth in household disposable income and consumption Annual figures. Per cent Real growth in consumption Real income growth SG Diplomat 1.. Sources: Statistics Norway and Norges Bank

12 1 1 - Credit growth Mainland economy Per cent Non-financial enterprises Total credit Households SG Diplomat 1.. Key aggregates for Norway. Percentage change from previous year 5 Mainland Demand Private consumption Public consumption Fixed investments Petroleum investments Traditional export Imports Mainland GDP Employment LFS unemployment 5 ¼ ¼ 1 ¾ 5½ ¼ ½ ½ ½ 1½ ½ ¼ ¼ 1¼ ¼ ¾ 1½ -5 ½ 1¾ ¾ ¾ SG Diplomat 1..