Norges Bank

11

Executive Board meeting23 April 2008

Norges Bank

2

0

1

2

3

4

5

2006 2007 2008 2009 2010 20110

1

2

3

4

5

-3

-2

-1

0

1

2

3

4

5

2006 2007 2008 2009 2010 2011-3

-2

-1

0

1

2

3

4

5

0123456789

2006 2007 2008 2009 2010 20110123456789

-1

0

1

2

3

4

5

2006 2007 2008 2009 2010 2011-1

0

1

2

3

4

5

Sources: Statistics Norway and Norges Bank

Baseline scenario MPR 1/08 with fan charts. Per cent

Output gap

CPI-ATECPI

90%

70%

50%

30%

Key policy rate

Norges Bank

3

Executive Board’s strategy

• The key policy rate should be in the interval 5%-6% in the period to the publication of the next Monetary Policy Report on 25 June, unless the Norwegian economy is exposed to major shocks.

Monetary Policy Report 1/08

Norges Bank

44

-2.5

-1.5

-0.5

0.5

1.5

2.5

3.5

4.5

5.5

2002 2003 2004 2005 2006 2007 2008

-2.5

-1.5

-0.5

0.5

1.5

2.5

3.5

4.5

5.5

Source: Statistics Norway

Weighted median

CPI-ATE

20 per cent trimmed mean

CPI

Inflation indicators 12-month change. Per cent. January 2002 – March 2008

Norges Bank

5

1

2

3

4

Jan-07 Jul-07 Jan-08 Jul-08

1

2

3

4

Jan 97/07 Jul 97/07 Jan 98/08 Jul 98/08

Domestically produced goods and services1)

Development since January 1997 and January 2007. 12-month change. Per cent

2007

1997

Sources: Statistics Norway and Norges Bank 1) Adjusted for tax changes and excluding energy products

Norges Bank

6

0

2

4

6

8

10

1983 1987 1991 1995 1999 2003 2007

0

2

4

6

8

10

Unemployed Percentage of labour force. Seasonally adjusted.

February 1983 – March 2008

Sources: Statistics Norway, Norwegian Labour and Welfare Administration (NAV) and Norges Bank

Registered unemployed and on labour market programmes

LFS unemployment

Registered unemployed

Norges Bank

7

-5

0

5

10

15

20

25

30

2002 2003 2004 2005 2006 2007 2008

-10

0

10

20

30

2002 2003 2004 2005 2006 2007 2008

Households Enterprises

House prices

Property prices and creditGrowth from same month/half-year previous year.

Per cent. January 2002 ― March 2008

Credit

Credit

Commercial property prices

Sources: Norwegian Association of Real Estate Agents, Association of Real Estate Agency Firms, Finn.no, ECON Pöyry, Statistics Norway and Norges Bank

Norges Bank

8

0,0

0,5

1,0

1,5

2,0

2,5

Q1 06 Q3 06 Q1 07 Q3 07 Q1 08

0,0

0,5

1,0

1,5

2,0

2,5

Actual

MPR 1/08Monthly indicator MPR 1/08

Mainland GDP Basic values excluding energy production. Growth on previous quarter.

Seasonally adjusted. Per cent. 06 Q1 – 08 Q2

Sources: Statistics Norway and Norges Bank

Norges Bank

9

0

20

40

60

80

100

120

2004 2006 2008 2010

0

20

40

60

80

100

120

0

50

100

150

200

250

2001 2003 2005 2007

0

50

100

150

200

250Metals

Farmed salmon and trout

Aggregated export price index

Pulp and paper products

Oil price (Brent Blend) in USD per barrel

Futures prices (broken line)

Price indices1) for Norwegian exports in NOK

2001=100. Q1 2001 – Q1 2008

1) Norges Banks calculations are based on world market prices

21 April 08

Sources: Reuters (EcoWin), Statistics Norway and Norges Bank

10 March 08 (MPR 1/08)

Norges Bank

1010

International commodity prices in SDRIndex, week 1 2000 = 100. Week 1 2000 – Week 16 2008

50

100

150

200

250

300

2000 2002 2004 2006 2008

50

100

150

200

250

300

Non-food agriculturalsFood

Industrials

All items

Metals

Sources: Reuters (EcoWin), The Economist and Norges Bank

Norges Bank

11

Commodity prices, food In USD. Indices. 3 January 2006 = 100.

3 January 2006 – 21 April 2008

50

100

150

200

250

300

350

400

2006 2007 2008

50

100

150

200

250

300

350

400

Soyabeans

Wheat

Coffee

Maize

Sources: Reuters (EcoWin)

Norges Bank

12

0.0

0.4

0.8

1.2

1.6

2.0

2.4

2.8

Aug-07 Oct-07 Dec-07 Feb-08 Apr-08

0.0

0.4

0.8

1.2

1.6

2.0

2.4

2.8

Sources: Consensus Economics, IMF and Norges Bank

Projections for GDP growth in the US in 2008 August 2007 – April 2008

Goldman Sachs

JP Morgan

Morgan Stanley

IMF

Norges Bank

Consensus Forecasts

Norges Bank

13

0.0

0.4

0.8

1.2

1.6

2.0

2.4

2.8

3.2

Jan-08 Feb-08 Mar-08 Apr-08

0.0

0.4

0.8

1.2

1.6

2.0

2.4

2.8

3.2

Consensus Forecasts

Projections for GDP growth in the US in 2009January 2008 – April 2008

Goldman Sachs

JP Morgan

Morgan Stanley

IMF

Norges Bank

Sources: Consensus Economics, IMF and Norges Bank

Norges Bank

14

CPI/HICP 12-month change. January 1997 – March 2008

-2

-1

0

1

2

3

4

5

1997 1999 2001 2003 2005 2007

-2

-1

0

1

2

3

4

5

US

Euro area

Japan

UK

Sources: Reuters (EcoWin) and national statistics agencies

Norges Bank

15

-4

0

4

8

12

16

20

2002 2003 2004 2005 2006 2007 2008

-4

0

4

8

12

16

20

China

Consumer prices in BRIC countries1)

12-month change. Per cent. January 2002 – March 2008

Brazil

India2)

Russia

1) Brazil, Russia, India and China2) Wholesale prices. 12-month change calculated on

the basis of weekly figures. Sources: Thomson Reuters and Norges Bank

Norges Bank

16

0

1

2

3

4

5

6

Apr-02 Dec-02 Aug-03 Apr-04 Dec-04 Aug-05 Apr-06 Dec-06 Aug-07 Apr-080

1

2

3

4

5

6

Credit premiums on corporate bonds1)

Five-year maturity. In percentage points. 10 April 2002 – 21 April 2008

USA

Europa

Source: Reuters (EcoWin)1) Bonds with a BBB rating.

Norges Bank

17

0.0

0.2

0.4

0.6

0.8

1.0

1.2

May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Difference between three-month money market rates and expected key rates1)

In percentage points. Historic (from 1 May 2007) and ahead (at 21 April 2008)

Norway 2)

US

UK

Euro area

Sources: Bloomberg, Reuters and Norges Bank1) The expected key rate is measured by the Overnight Indexed Swap (OIS). 2) Norges Bank’s estimates.

Norges Bank

18

0

1

2

3

4

5

6

Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

0

1

2

3

4

5

6

Sources: Reuters and Norges Bank

Key policy rates and forward rates13 March and 21 April 2008

Norway

US

Euro area21 April 2008

After previous monetary policy meeting (13 March 2008)

UK

Norges Bank

19Sources: Reuters and Norges Bank

4

4.5

5

5.5

6

Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11

4

4.5

5

5.5

6

Market 21 April 2008

Key policy rate in the baseline scenario and estimated forward rates1)

Per cent

19

Market after MPR 1/08 (13 March 2008)

Baseline scenario MPR 1/08Baseline scenario MPR 1/08

I) A credit risk premium and a technical difference of 0.20 percentage point have been deducted to ensure comparability with the key policy rate.

Norges Bank

20

3.75

4.25

4.75

5.25

5.75

6.25

6.75

May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08

3.75

4.25

4.75

5.25

5.75

6.25

6.75

Key policy rate, money market rate1) and banks’ lending rate on new loans2) In per cent. 3 May 2007 – 22 April 2008

Mortgage rate

Money market rate

Key rate

1) 3-month NIBOR2) Interest rates on new mortgage loans for NOK 1 million within 60%

of purchase price with floating interest rate. Figures for the 20 largest banks, weighted according to market share. Sources: Norsk familieøkonomi AS and Norges Bank

Norges Bank

21

85

88

91

94

97

100

103

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

-1

0

1

2

3

4

5

21 April 2008

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

January 2002 – December 2011

21 April 2008

MPR 1/08

Weighted interest ratedifferential (left-hand scale)

I-44 (right-hand scale)

Sources: Reuters and Norges Bank

1) A rising curve denotes an appreciation of the krone.

Norges Bank

22

-20

-15

-10

-5

0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010

-20

-15

-10

-5

0

5

10

15

20

25

Real exchange rateDeviation from mean1). 1970 – 20082). Per cent

1) Mean in the period 1970-2007. 2) Data for 2008 based on observations to 21 April

Mean January - April 2008Relative consumer

prices

Relative wage costs

Sources: Statistics Norway, Technical Reporting Committee on Income Settlements, Ministry of Finance and Norges Bank

Norges Bank

2323

Key policy rate

Source: Norges Bank

0

1

2

3

4

5

6

7

8

9

2005 2006 2007 2008 2009 2010 2011

0

1

2

3

4

5

6

7

8

9

Strategy interval

1/053/04

2/053/05 1/06

2/063/06

2/071/07

3/07

MPR 1/08

1/08