BANK OF FINLAND Monetary Policy and Research - Financial Markets and Statistics Main Indicators for the Finnish Economy 11/1 1 November 1
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Main Indicators for the Finnish Economy is produced jointly by the Monetary Policy and Research department and Financial Markets and Statistics department and it is issued monthly. The review is unofficial, and the Bank of Finland is not liable for any possible errors. Main Indicators for the Finnish Economy is posted on our website http://www.bof.fi/en/julkaisut/selvitykset_ja_raportit/main/index.htm Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Charts and Tables Monetary policy and market interest rates Chart 1. Eurosystem interest rates 5 Chart. Euribor rates 5 Chart 3. International three-month interest rates Chart. International long-term interest rates Chart 5. Yield on ten-year Finnish government bonds and differential vs. Germany 7 Chart. Yield curve 7 Banking in Finland Chart 7. Average interest rates on loans and deposits Chart. Average interest rates on new loans to households Chart 9. Stock of bank lending by interest rate linkage 9 Chart 1. Stock of bank deposits by interest rate linkage 9 Chart 11. Growth of deposits 1 Chart 1. Growth of lending 1 Chart 13. Liabilities of Finnish MFIs in the Finnish contribution to euro area monetary aggregates 11 Chart 1. Outstanding loans to households and non-financial corporations 11 Securities market Chart 15. Selected stock price indices in the euro area 1 Chart 1. OMX Nordic Exchange Helsinki: share indices by sector 1 Chart 17. Listed shares in Finland: total market capitalization and non-residents holdings 13 Chart 1. Non-residents portfolio investments in Finland 13 Chart 19. Bonds issued in Finland 1 Chart. Mutual funds registered in Finland 1 Borrowing by sector in Finland Chart 1. Non-financial corporate sector and household borrowing 15 Chart. Sectoral debt ratios in Finland 15 Exchange rates Chart 3. Euro exchange rates against the US dollar and the yen 1 Chart. Euro exchange rates against the pound sterling and the Swedish krona 1 Chart 5. Euro s external value and Finland s competitiveness indicator 17 Chart. Competitiveness indicators for Finland 17 Real economy Chart 7. GDP, volume, Finland and euro area 1 Chart. GDP, volume, Finland, monthly indicator 1 Chart 9. Industrial production, volume, Finland and euro area 19 Chart 3. Industrial confidence indicator, Finland and euro area 19 Chart 31. Manufacturing production by sector in Finland, volume index Chart 3. Finland's imports of goods, volume Chart 33. Consumption in Finland, volume 1 Chart 3. Consumer confidence, Finland and euro area 1 Chart 35. Fixed investment in Finland, volume Chart 3. Construction indicators Chart 37. Exports of goods, volume, Finland 3 Chart 3. Exports by industry, Finland 3 Table 1. Supply, demand and labour market indicators Main Indicators 3
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Prices and costs Chart 39. Consumer prices (CPI), Finland and euro area 5 Chart. Harmonized index of consumer prices (HICP), Finland and euro area 5 Chart 1. Inflation rates in the euro area (HICP) Chart. Producer prices, Finland and euro area Chart 3. Earnings in Finland 7 Chart. Hourly labour costs 7 Chart 5 Finland's export prices, import prices and terms of trade Chart. Dwelling prices in Finland Table. Cost and price indicators 9 Labour market Chart 7. Unemployment rate, Finland and euro area 3 Chart. Employment in Finland 3 Public finances Chart 9. Public sector balances in Finland 31 Chart 5. Public sector debt in Finland 31 External balance Chart 51. Goods account and current account, Finland 3 Chart 5. Net international investment position, Finland 3 Table 3. External balance and sectoral balances indicators 33 Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Monetary policy and market interest rates Chart 1. Eurosystem interest rates Marginal lending rate Deposit rate Main refinancing rate / minimum bid rate 7 % 5 3 1 1 Sources: European Central Bank. Chart. Euribor rates % 1-month 3-month 1-month 5 3 1 1 Sources: Reuters. Main Indicators 5
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Chart 3. International three-month interest rates Euro area United States United Kingdom Japan 1 % - 1 Sources: Reuters and European Central Bank. Chart. International long-term interest rates Germany United States United Kingdom Japan % 1 Source: Reuters. Note: Yield on ten-year government bonds. Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Chart 5. 7 5 3 1-1 - Yield on ten-year Finnish government bonds and differential vs. Germany % Yield Differential 1 Source: Reuters. Chart. 5. Euro area (Finland's) yield curve (zero coupon yield curve) % November 9 August 9.5. 3.5 3..5. 1.5 1..5. 1 3 5 7 9 1 Source: Bank of Finland. Years to maturity Note: BOF estimation using Nelson & Siegel (197) yield curve model applied to Eonia and Euribor rates and Finnish benchmark government bond yields. Note : Due to recent turmoil in financial markets, the estimate of the yield curve is biased and, therefore, cannot be interpreted in a mechanical way. Main Indicators 7
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Banking in Finland Chart 7. 7 5 3 1 Interest rates on loans and deposits % New bank loans Bank loans, stock Bank deposits, stock New business on MFI loans MFI loans, stock MFI deposits, stock 1999 1 3 5 7 9 Source: Bank of Finland. The data collection process changed from 1 January 3, with the coming into force of the ECB Regulation concerning statistics on interest rates ECB/1/1. Consecutively, the reporting population has been extended to cover credit institutions, in addition to deposit banks. Chart. Interest rates on new loans to households 7 % Banks' new housing loans Banks' new consumer credit 1-month Euribor MFIs' housing loans MFIs' consumer credit 5 3 1 1999 1 3 5 7 9 Source: Bank of Finland. See note in Chart 7. Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Chart 9. 1 Stock of bank lending by interest rate linkage Linked to 3 and 5-year reference rates % Linked to base rate Linked to other rates (as from 3, also loans linked to base rate and fixed-rate loans) Fixed-rate Linked to banks' own reference rates Linked to Euribor 1999 1 3 5 7 9 Source: Bank of Finland. See note in Chart 7. Chart 1. 1 Stock of bank deposits by interest rate linkage Linked to base rate % Linked to other interest rates (as from 3, includes also deposits linked to base rate) Fixed-rates Linked to banks' own reference rates Linked to Euribor 1999 1 3 5 7 9 Source: Bank of Finland. See note in Chart 7. Main Indicators 9
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Chart 11. Euro area and Finnish MFIs: growth of deposits Deposits of euro area residents with Finnish MFIs Deposits of euro area residents with euro area MFIs Percentage change from previous year 1 1 1 1 1-1999 1 3 5 7 9 Sources: European Central Bank and Bank of Finland. Chart 1. Euro area and Finnish MFIs: growth of loans 1 Loans by Finnish MFIs to euro area residents Loans by euro area MFIs to euro area residents Percentage change from previous year 1 1 1-1999 1 3 5 7 9 Sources: European Central Bank and Bank of Finland. 1 Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Chart 13. Liabilities of Finnish monetary financial institutions included in monetary aggregates for the euro area * 1 1 1 1 1 - - M1 M M3 Percentage change from previous year 7 9 1 Source: Bank of Finland. * Note: Excluding currency in circulation with the public. Chart 1. Outstanding loans to households and non-financial corporations To households by MFIs To non-financial corporations by MFIs To households by banks To non-financial corporations by banks * 11 EUR billion 1 9 7 5 3 1 1999 1 3 5 7 9 Source: Bank of Finland. * Note: The series includes structural changes. Main Indicators 11
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Securities market Chart 15. Selected stock price indices in the euro area Finland: OMX Helsinki Euro area: DJ Euro Stoxx Germany: DAX 1 Index Dec 1999=1 1 1 1999 1 3 5 7 9 Sources: Bloomberg and NASDAQ OMX Helsinki. Chart 1. NASDAQ OMX Helsinki: share indices by sector Commercial banks Paper & Forest Products Machinery Technology Hardware & Equipment Index Jan 1=1 3 1 5 7 9 1 Source: NASDAQ OMX Helsinki. 1 Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Chart 17. Listed shares in Finland: total market capitalization and non-residents' holdings Total market capitalization (left-hand scale) Non-residents' holdings (left-hand scale) Non-residents' holdings as % of market capitalization (right-hand scale) EUR billion % 7 5 1 1 3 1 5 7 9 Sources: NASDAQ OMX Helsinki and Euroclear Finland. Chart 1. Non-residents' portfolio investments in Finland 1-month moving totals Finnish shares, net purchases Finnish bonds and money market paper, net purchases 3 EUR billion 5 15 1 5-5 -1 7 9 1 Source: Bank of Finland. Main Indicators 13
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Chart 19. Bonds issued in Finland Government Monetary financial institutions Non-financial corporations Others End-month stock, EUR billion 7 5 3 1 7 9 1 Source: Statistics Finland. Chart. Mutual funds registered in Finland Equity funds (left-hand scale) Balanced funds (left-hand scale) All funds: net subscriptions (right-hand scale) Fixed-income funds (left-hand scale) Risk funds (left-hand scale) EUR billion EUR billion 7 5 5 3 3 1 1-1 5 7 9 1 - Source: Finnish Association of Mutual Funds. 1 Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Borrowing by sector in Finland Chart 1. 1 Non-financial corporate sector and household borrowing 1 = corporate sector (excl. housing corporations), = households. Banks Other financial institutions General government Rest of the world Change in stocks, EUR billion 1 - - * * - 5 7 9 1 Sources: Bank of Finland and Statistics Finland. *Note: Corrected for changes in sectoral classification. Chart. Sectoral debt ratios in Finland % of GDP Non-financial corporate sector excl. housing corporations Household sector Central government 1999 1 3 5 7 9 Sources: Statistics Finland, State Treasury and Bank of Finland. Main Indicators 15
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Exchange rates Chart 3. Euro exchange rates against the US dollar and the yen Value of one euro in US dollars (left-hand scale) Value of one euro in Japanese yen (right-hand scale) 1. 1 1. 1 1. 1 1. 1 1 1.. 1 Sources: European Central Bank and Reuters. Chart. Euro exchange rates against the pound sterling and the Swedish krona Value of one euro in pounds sterling (left-hand scale) Value of one euro in Swedish krona (right-hand scale) 1. 1.9 11. 1.7 9..5 1 Sources: European Central Bank and Reuters. 7 1 Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Chart 5. Euro's external value and Finland's competitiveness indicator Finland's narrow competitiveness indicator Euro's effective exchange rate 13 Index 1999Q1=1 1 11 1 9 1 Sources: European Central Bank and Bank of Finland. Note: An upward movement of the index represents an appreciation of the euro/ a weakening in Finnish competitiveness. The method of calculation is described in the Bank of Finland Bulletin 1/. Chart. Competitiveness indicators for Finland Nominal Real (deflated by consumer prices) 1 Index 1999Q1=1 11 1 9 1 Source: Bank of Finland. Note: Narrow plus euro area competitiveness indicator. See also note in Chart 5. Main Indicators 17
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Real economy Chart 7. Gross domestic product Finland Euro area Bank of Finland forecast, European Commission forecast, September 1 spring 1 Percentage change in volume from previous year - - - - -1 1 Sources: Statistics Finland, Bank of Finland, European Central Bank and European Commission. Chart. Gross domestic product in Finland 1 GDP monthly indicator at producer prices GDP at market prices Bank of Finland forecast, September 1 Percentage change in volume from previous year 9 3-3 - -9-1 7 9 1 Sources: Bank of Finland and Statistics Finland. 1 Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Chart 9. Industrial production Finland Euro area 3 Percentage change in volume from previous year 1-1 - -3 1 Sources: Statistics Finland and Eurostat. Chart 3. Industrial confidence indicator Finland Euro area 3 Percentage balance, s.a. 1-1 - -3-1 Source: European Commission. Main Indicators 19
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Chart 31. Manufacturing production by sector Electronics industry Other metal industry Forest industry 1 Index 5=1, s.a. 1 1 1 1 1 Source: Statistics Finland. Chart 3. Finland's imports of goods 3-month moving average, percentage change from previous year 1-1 - -3-1 Source: National Board of Customs. Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Chart 33. Consumption in Finland Private consumption Bank of Finland forecast, September 1 Retail sales Percentage change in volume from previous year - - - 1 Sources: Bank of Finland and Statistics Finland. Chart 3. Consumer confidence Finland Euro area 3 Percentage balance, s.a. 1-1 - -3-1 Source: European Commission. Main Indicators 1
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Chart 35. Fixed investment in Finland Fixed investment (left-hand scale) Machinery and equipment (left-hand scale) Spare capacity (right-hand scale) Percentage change in volume from previous year % 35 3 1 3 5-1 - -3-1 Source: Statistics Finland. 15 1 5 Chart 3. Construction indicators All building starts, four-quarter moving total (percentage change from previous year) Residential buildings starts, four-quarter moving total (percentage change from previous year) Industrial investment prospects (percentage balance) 5 3 1-1 - -3-1 Sources: Statistics Finland and Confederation of Finnish Industries. Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Chart 37. Finland's exports of goods 3 3-month moving average, percentage change from previous year 1-1 - -3-1 Source: National Board of Customs. Chart 3. Finland's exports by industry Electronics industry Other metal and engineering industry Forest industry Other industry 1-month moving totals, percentage of total exports 35 3 5 15 1 1 Source: National board of customs. Note: From January 9 onwards, the data is presented according to a new classification (CPA). Main Indicators 3
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Table 1. Supply, demand and labour market indicators Supply and demand percentage change in volume from previous year 9 1 actual 1* 11* Gross domestic product.9 -. 3.7 Q. 3. at market prices 1.9 Q1-Q GDP monthly indicator. -. 5.9 M at producer prices.5 M1-M Manufacturing production 1.9 -.3. M9 3. M1-M9 Consumption expenditure 1.9-1. 1. Q 1.7 Q1-Q - private 1.7-1.9. Q.3.5. Q1-Q - general government. 1. -.7 Q.1.. Q1-Q Gross fixed capital formation -. -1.7. Q -. Q1-Q - private -.3-17.. Q. 7.9-3. Q1-Q - general government -.7.1.3 Q -3.5 -.5.3 Q1-Q Domestic demand. -.7. Q 1. Q1-Q Exports of goods and services.3 -.3.1 Q 5.7.3.7 Q1-Q Imports of goods and services.5-1.1 3.7 Q 3.7 9. -1. Q1-Q Labour market indicators Employed persons 1. -.9 -. M9 -..9 percentage change from previous year -. M1-M9 Unemployment rate, s.a.**...1 M9...5 M1-M9 Source: Statistics Finland. * Bank of Finland forecast, September 1. ** Seasonally adjusted by the Bank of Finland. Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Prices and costs Chart 39. Consumer prices Consumer price index Bank of Finland forecast, September 1 5 Percentage change from previous year 3 1-1 - 1 Sources: Bank of Finland and Statistics Finland. Chart. Harmonized index of consumer prices (HICP) 5 Finland Euro area European Commission forecast, Spring 1 Bank of Finland forecast, September 1 Percentage change from previous year 3 1-1 5 7 9 1 11 Sources: Bank of Finland, European Commission, Eurostat and Statistics Finland. Main Indicators 5
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Chart 1. Inflation rates in the euro area (HICP) Finland Germany Min Max Percentage change from previous year - - 7 9 1 Sources: Eurostat and Statistics Finland. Chart. Producer prices Finland Euro area 11 Percentage change from previous year 9 7 5 3 1-1 -3-5 -7-9 -11 1 Sources:Eurostat and Statistics Finland. Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Chart 3. Earnings in Finland Negotiated wages Wage drift Real earnings Bank of Finland forecast, September 1 Percentage change from previous year - 1999 1 3 5 7 9 11 Source:Statistics Finland. Chart. Hourly labour costs Finland Euro area 1 Percentage change from previous year - 1 3 5 7 9 Source: Eurostat. Note 1: Whole economy excl. agriculture, public administration, education, health and services not elsewhere classified. Note : Eurostat and Statistics Finland have revised the compilation of quarterly statistics on labour costs. The data are based on the new index from Q1 onwards. Main Indicators 7
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Chart 5. Finland's export prices, import prices and terms of trade Export price index, goods Import price index, goods Terms of trade 13 Index 5=1 1 11 1 9 1 Sources: Statistics Finland and Bank of Finland. Chart. 35 Dwelling prices in Finland Index 1995=1 Capital region House price index, whole country, total index Whole country, real prices (deflated by consumer prices) 3 5 15 1 1 Sources: Statistics Finland and Bank of Finland. Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Table. Cost and price indicators Percentage change from previous year 9 1 Actual 1* 11* Labour costs Index of wages and salaries..3 Q3.7..7 Q1-Q3 Unit labour costs - whole economy 7. -1.9 Q -1.3 -.1-1.7 Q1-Q Price indices Export prices (goods) - export price index -9..7 M9 3.5 M1-M9 - export price deflator -11. 7.1 Q. Q1-Q Import prices (goods) - import price index -11.. M9 5. M1-M9 - import price deflator -1..9 Q.5 Q1-Q Producer prices -5.7 7. M9. M1-M9 Wholesale prices -..3 M9.5 M1-M9 Consumer prices - consumer price index. 1. M9 1.1..7 M1-M9 - harmonized index of consumer prices 1. 1. M9 1. 1.9 1. M1-M9 Asset prices Stumpage prices -15. 1.7 M9. M1-M9 Dwelling prices, whole country -.3 7. Q3 9. Q1-Q3 Share prices -3.9 17. M1. M1-M 1 Sources: Finnish Forest Research Institute, OMX Nordic Exchange Helsinki Oy and National Board of Customs and Statistics Finland. * Bank of Finland forecast, September 1 Main Indicators 9
1 November 1 Monetary Policy and Research - Financial Markets and Statistics Labour market Chart 7. Unemployment rate Finland, s.a.* Euro area, s.a. 1 % Bank of Finland Forecast, September 1 European Commission Forecast, Spring 1 11 1 9 7 5 1 Sources: Statistics Finland, Bank of Finland, Eurostat and European Commission. * Seasonally adjusted by the Bank of Finland. Chart. Employment in Finland Labour force, s.a.* Total number of employed, s.a.* Bank of Finland Forecast, September 1 1 persons Bank of Finland Forecast, September 1 7 5 3 1 Sources: Statistics Finland and Bank of Finland. * Seasonally adjusted by the Bank of Finland. 3 Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Public finances Chart 9. Public sector balances in Finland General government net lending Bank of Finland forecast, September 1 % of GDP - - - 1 Sources: Statistics Finland and Bank of Finland. Chart 5. Public sector debt in Finland % of GDP General government EMU-debt Bank of Finland forecast, September 1 Central government debt Bank of Finland forecast, September 1 1 Sources: Statistics Finland, State Treasury and Bank of Finland. Main Indicators 31
1 November 1 Monetary Policy and Research - Financial Markets and Statistics External balance Chart 51. Finland's goods account and current account 1-month moving totals Goods account, fob Current account Bank of Finland Forecast, September 1 EUR billion 15 1 5-5 1 Source: Bank of Finland. Chart 5. 5 Finland's net international investment position Net international investment position Net international investment position excl. equity capital % of GDP -5-1 -15-1999 1 3 5 7 9 Source: Bank of Finland. 3 Main Indicators
Monetary Policy and Research - Financial Markets and Statistics 1 November 1 Table 3. Finland's balance of payments, EUR billion 9 1 1 1* 11* January August August Current account 5..7 1.3.5 3..3 Goods account.9 3. 1.. Exports, fob 5. 5.1 3.1. Imports, fob 5. 1.7 3.5. Services 1.1 1.3..1 Credit 1. 19. 11. 1.5 Debit.7 1.5 11.1 1. Income and current transfers -.. -.. -1.1 -. Capital account..1.1. Financial account 9.1 11. -1.9 7. Direct investment -7.1 -. -.. Abroad.3. 3.. In Finland -.7. 1..5 Portfolio investment 5.3 -.5 -. -1. Assets. 1.1. 1. Liabilities 5.3. 5.9. Other investment 9. 1.7 1.7 9.1 Assets..5-1. 3. Liabilities 17. 17.. 1.1 Financial derivatives 1.. -.7 -.9 Reserve assets (increase -) -. -. 1.1.3 Errors and omissions -1.7-15.9.5-7.9 31 December 31 December 9 31 August 1 Net international investment position -1. -9.3 9.1 excluding equity items -.9-39.7 -.3 *Bank of Finland forecast, September 1 Main Indicators 33