Norges Bank Executive Board meeting 14 December 2005

Norges Bank Executive Board meeting 14 December 2005 1

Norges Bank GDP growth trading partners Seasonally adjusted volume growth on previous quarter. Per cent. 02 Q 1 – 05 Q 3 US 18 Trading partners Sweden Euro area Sources: Eco. Win / National statistical offices and Norges Bank 2

Norges Bank Growth forecasts for 2006 from Consensus Forecasts Source: Consensus Forecasts 3

Norges Bank CPI/HICP 1) 12 -month change. Per cent. January 2002 – November 2005 USA 3) Euroområdet Storbritannia 1) Harmonised index of consumer prices 2) UND 1 X 3) Sverige 2) Figures from October Source: Eco. Win Eurostat 4

Norges Bank CPI core 1) 12 -month change. January 1999 – October 2005 US Euro area UK Sweden 1) US: CPI excl. food and energy Euro area, UK and Sweden: CPI excl. energy, food, alcohol and tobacco Source: Eco. Win Eurostat 5

Norges Bank Actual and expected key rates June 2003 – December 2008 UK Sweden Euro area US 13 December 2 November Sources: Reuters and Norges Bank 6

Norges Bank Oil price Brent Blend and futures prices USD per barrel. 3 January 2002 – 13 December 2005 13 December 27 October (IR 3/05) Sources: Telerate, IPE and Norges Bank 7

Norges Bank Oil futures prices USD per barrel light crude. 3 January 2004 – 12 December 2005 Delivery in 1 month Delivery in 6 -7 years Source: Eco. Win/ NYMEX 8

Norges Bank International commodity prices in USD Indices, Week 1 2000 = 100. Week 1 2000 - Week 49 2005 Agricultural products excl. food Manufacturing Metals Source: Eco. Win / The Economist 9

Norges Bank Developments in international equity indices Total return. Indexed, 3 January 2005 = 100. 3 January 2005 – 12 December 2005 Source: Eco. Win 10

Norges Bank CPI and CPI-ATE 1) 12 -month change. Per cent. January 2002 – November 2005 CPI-ATE 1) CPI-ATE: CPI adjusted for tax changes and excluding energy products Source: Statistics Norway 11

Norges Bank CPI-ATE 12 -month change. Per cent. Broken lines are projections from IR 3/05. January 2004 – November 2005 Goods and services produced in Norway (0. 7)1) CPI-ATE Imported consumer goods (0. 3) 1) Norges Bank's calculations Sources: Statistics Norway and Norges Bank 12

Norges Bank Expected CPI-ATE 1) and output gap in 2005 Q 4 Projections from IR 3/04 - IR 3/05. Per cent Projections for 2005 Q 4 CPI-ATE Goods and services produced in Norway Imported consumer goods Output gap IR 3/04 1. 6 2. 1 0. 3 1 IR 1/05 1. 4 2. 3 -0. 7 1¼ IR 2/05 1. 3 2. 4 -1. 2 1 IR 3/05 1. 2 2. 0 -0. 7 ¾ Updated IR 3/052) 1. 2 2. 0 -1. 1 1) 4 -quarter change 2) Projections from Inflation Report 3/05 updated with actual figures for October and November Sources: Statistics Norway and Norges Bank 13

Norges Bank 3 -month interest rate differential and import-weighted exchange rate (I-44) 1) Monthly figures. January 2002 – December 2005 I-44 (right-hand scale) Weighted 3 -month interest rate differential (left-hand scale) 31 October 2005 13 December 2005 1) A rising curve denotes a stronger krone exchange rate Sources: Bloomberg and Norges Bank 14

Norges Bank's and the market's overnight deposit rate scenario 1) Market now Market before IR 3/05 Interest rate scenario IR 3/05 1) The light grey and dark grey intervals indicate the highest and lowest interest rates, respectively, in the market's overnight deposit rate scenario in the last 10 days before the Inflation Report (14 -27 Oct) and the last 10 days before 13 December. Source: Norges Bank 15

Norges Bank Unemployed In thousands. Seasonally adjusted. January 2001 – November 2005 Registered unemployed and LFS unemployment on labour market programmes Registered unemployed Sources: Statistics Norway and the Directorate of Labour 16

Norges Bank Number employed Figures from LFS and QNA. In thousands. Monthly and quarterly figures. February 1998 – September 2005 QNA (right-hand scale) LFS (left-hand scale) Source: Statistics Norway 17

Norges Bank House prices 4 -quarter change. Actual change and model projections in IR 3/05. Per cent Average Oct/Nov Source: Norges Bank 18

Norges Bank Credit growth Total debt mainland Norway (C 3). Domestic credit to households (C 2) 12 -month change. Per cent Total debt non-financial enterprises mainland Norway (C 3) (left-hand scale) Households (C 2) (right-hand scale) Total debt mainland Norway (C 3) (left-hand scale) Sources: Statistics Norway and Norges Bank 19

Norges Bank Unit labour costs (ULC)1) and domestic inflation Change on same period previous year ULC Domestic inflation 1) Mainland Norway excl. the energy sector. 3 -quarter moving average (centred) Sources: Statistics Norway and Norges Bank 20

Norges Bank Order backlogs and new orders in manufacturing Unrevised figures. Index. 1995 = 100. 1993 Q 1 – 2005 Q 3 New orders Order backlogs Source: Statistics Norway 21

Norges Bank New orders building and construction Trend. Value index, 2000 = 100. 2002 Q 1 - 2005 Q 3 Construction Dwellings Other buildings Source: Statistics Norway 22

Norges Bank Investment intentions survey. Petroleum activities Assumed and actual investment. Quarterly figures. In billions of NOK 2005 2004 2006 2003 2002 Estimate published previous year Estimate published current year Final figures Source: Statistics Norway 23

Baseline scenario in Inflation Report 3/05 Sight deposit rate CPI-ATE Norges Bank Importweighted exchange rate Output gap 24

Norges Bank Monetary Policy Strategy - Inflation Report 3/05 • "The Executive Board's assessment is that the sight deposit rate should be in the interval 2 – 3 per cent in the period to the publication of the next Inflation Report on 16 March 2006, conditional on economic developments that are broadly in line with the projections. " • The Executive Board's assessment is that the interest rate may gradually in small, not too frequent steps, be brought back towards a more normal level. The objective of bringing inflation back to target and anchoring inflation expectations nevertheless implies that monetary policy remains expansionary. 25

Norges Bank Executive Board meeting 14 December 2005 26