1. Inflation Report 1/2005

2. Main features of the economic outlook

3. Chart 1 Projections and uncertainty for CPI-ATE. 1) 4-quarter change. Per cent. 01 Q1 – 08 Q4 30%50%70%90% 1) The bands in the fan indicate different probabilities for developments in the CPI-ATE. Probabilities are based on the difference between projected and actual developments in underlying inflation in the period 1997 – 2004 Sources: Statistics Norway and Norges Bank

4. 30%50%70%90% Chart 2 Projections and uncertainty for growth in mainland GDP. 1) Annual change. Per cent. 2001 – 2008 1) The bands in the fan indicate different probabilities for growth in mainland GDP. Probabilities are based on the difference between projected and actual developments in mainland GDP in the period 1994 -2003 Sources: Statistics Norway and Norges Bank

5. Section 1

6. Chart 1.1 Interest rate expectations. Actual developments and expected key rate 1) at 10 March 05. Per cent. 2 Jan 03 – 1 Nov 06 US Euro area Norway UK 1) FRAs and futures contracts adjusted for the estimated difference between 3-month money market rates and the key rate Sources: Reuters and Norges Bank

7. Chart 1.2 Forward interest rates 1) 2). Monthly figures. Per cent. Jan 02 – Dec 08 1) The money market rate is normally about ¼ percentage point higher than the sight deposit rate 2) 3-month money market rates to end-February 2005 Source: Norges Bank Forward rate 10 March 05 3-month money market rate Forward rate 28 October 04 (IR 3/04)

8. 1) Estimated as a weighted average of trading partners' forward rates Source: Norges Bank Norway Trading partners 1) Chart 1.3 Forward interest rates. Monthly figures. Per cent. Oct 04 – Dec 08 10 March 05 28 October 04

9. 1) A rising curve denotes a weaker krone exchange rate Source: Norges Bank Chart 1.4 Nominal effective exchange rate 1). Import-weighted exchange rate index (I-44, 1995=100) and the trade-weighted exchange rate index (TWI, 1990=100). Monthly figures. Jan 90 – Feb 05 I-44 TWI

10. Chart 1.5 Real exchange rates (relative consumer prices and labour costs in common currency). Annual figures. Per cent. Deviation from average 1970 – 2004 1) 1) Average nominal exchange rate (TWI) for 2005 based on the average so far this year (through 10 March) 2) Projections for wage growth in 2005 from IR 1/05 3) Projections for consumer price inflation in 2005 from IR 1/05 Sources: Statistics Norway, TRCIS, the Ministry of Finance and Norges Bank Relative prices 3) Relative labour costs in manufacturing 2)

11. Chart 1.6 Value added, mainland Norway. Index. 2001 = 100. Seasonally adjusted. Quarterly figures. 99 Q1 – 04 Q4 Goods Services 1) Mainland Norway 1) Excluding public sector Source: Statistics Norway

12. Chart 1.7 Output, employment and productivity. Average quarterly growth (annualised) up to 04 Q4. Per cent Sources: Statistics Norway and Norges Bank

13. Chart 1.8 Number of sick pay days paid by the National Insurance per employee. 1) Per cent. Annual figures. 1980 – 2004 1) Since 2000 the sick pay scheme has also applied to all central government employees. This results in a break in the series between 1999 and 2000 Source: National Insurance Administration

14. Chart 1.9 Person-days lost due to sickness absence, both self-certified and doctor-certified, for employees aged 16-69. Per cent of contractual person-days. Quarterly figures. 00 Q2 – 04 Q3 Source: Statistics Norway

15. Chart 1.10 Demand. Average quarterly growth (annualised) through 04 Q4. Per cent Sources: Statistics Norway and Norges Bank

16. Chart 1.11 Housing investment and housing starts. Seasonally adjusted. 00 Q1 – 04 Q4 Housing investment, in millions of 2002-NOK (left-hand scale) Housing starts, in 1000 m 2 (right-hand scale) Sources: Statistics Norway and Norges Bank

17. Chart 1.12 Growth in credit to households and enterprises. 1) 12-month growth. Per cent. Jan 97 – Jan 05 Credit to non-financial enterprises 1) From domestic sources (C2) Source: Norges Bank Credit to households

18. Chart 1.13 Mainland fixed investment. Average quarterly growth (annualised) through 04 Q4. Per cent 1) Excluding public sector Sources: Statistics Norway and Norges Bank 1)

19. Chart 1.14 Vacant office premises in Oslo, Asker and Bærum. Per cent of total property stock. Annual figures. 1991 – 2005 1) 1) As at February Source: Eiendomsspar AS

20. Chart 1.15 CPI-ATE 1). Total and by supplier sector. 2) 12-month change. Per cent. Jan 02 – Feb 05 1) CPI-ATE: CPI adjusted for tax changes and excluding energy products 2) Norges Bank's estimates Sources: Statistics Norway and Norges Bank Goods and services produced in Norway CPI-ATE Imported consumer goods Actual IR 3/04

21. Chart 1.16 Contribution to the decline in the CPI-ATE inflation from Dec 01. Percentage points. Jan 02 – Feb 05 Imported consumer goods House rents Remainder 1) Other services 1) Agricultural products, fish products, consumer goods produced in Norway, services with wages as dominant factor Sources: Statistics Norway and Norges Bank

22. Chart 1.17 CPI-ATE. Seasonally adjusted monthly change. 3-month moving average, annualised. Per cent. Jan 04 – Jun 05 1) Projections 1) Projections from Mar 05 – Jun 05 Sources: Statistics Norway and Norges Bank Historical

23. Chart 1.18 The output gap 1) and CPI-ATE. Quarterly figures. Per cent. 99 Q1 – 05 Q3 2) Sources: Statistics Norway and Norges Bank CPI-ATE Output gap 1) Quarterly figures for the output gap have been derived from annual figures. 2) Projections for 2005

24. Section 2

25. Chart 2.1 Chinese imports of crude oil and oil prices. Monthly imports in millions of tons. Oil price, USD/barrel. 6-month moving average. Apr 94 – Dec 04 Oil price (left-hand scale) Chinese imports of crude oil (right-hand scale) Sources: EcoWin / National Bureau of Statistics and Norges Bank

26. Chart 2.2 Chinese imports of aluminium and aluminium prices. Monthly imports in thousands of tons. Aluminium price in USD/ton. 6-month moving average. Apr 94 – Dec 04 Sources: EcoWin / National Bureau of Statistics and Norges Bank Aluminium spot price (left-hand scale) Chinese imports of aluminium (right-hand scale)

27. Chart 2.3 Oil price 1) in USD per barrel. Forward prices from 28 Oct 04 and 10 Mar 05. Daily figures. 2 Jan 02 – 31 Dec 07 28 October 04 IR 3-04 10 March 05 1) Brent Blend Sources: Telerate, IPE and Norges Bank

28. Chart 2.4 Crude oil stocks in the US. In million barrels. Weekly figures. Jan 03 – Mar 05 2004 2003 Source: Energy Information Agency 2005

29. Chart 2.5 Oil price futures. USD per barrel of light crude. Monthly figures. Jan 01 – Mar 05 1) Delivery in 6-7 years Delivery next month 1) The figure for March is the average up to and including the 10th Sources: EcoWin/NYMEX and Norges Bank

30. Chart 2.6 Producer prices among trading partners. 4-quarter change. Per cent. 98 Q1 – 04 Q4 Sources: National statistical offices and Norges Bank

31. Chart 2.7 Indicator of external price impulses to imported consumer goods measured in foreign currency. Annual figures. Per cent.1995 – 2008 1) 1) Projections for 2005 -2008 Source: Norges Bank

32. 2002 2003 2005 2004 Estimate made previous year Estimate made same year Chart 2.8 Investment intentions survey. Oil and gas recovery incl. pipeline transport. Estimated and actual investments. In billions of NOK Source: Statistics Norway Final figures MayAugNovFebMayAugNovFeb

33. Chart 2.9 Underlying spending growth in the government budget and nominal growth in mainland GDP. Growth on previous year. Per cent. 1985 – 2005 Sources: Ministry of Finance (NB 2005) and Statistics Norway Underlying spending growth Nominal growth in mainland GDP

34. Chart 2.10 Unit labour costs (ULC). Wholesale and retail trade and mainland Norway excl. public sector. Index. 1990=100. Annual figures. 1970 – 2004 Sources: Statistics Norway and Norges Bank Mainland Norway excl. public sector Retail trade

35. Section 3

36. Chart 3.1 The output gap 1) and CPI-ATE. Quarterly figures. Per cent. 99 Q1 – 05 Q3 2) Sources: Statistics Norway and Norges Bank CPI-ATE Output gap 1) Quarterly figures for the output gap have been derived from annual figures. 2) Projections for 2005

37. Chart 3.2 Real interest rate after tax. 1) Quarterly figures. 85 Q1 – 04 Q4 1) 3-month money market rates deflated by the CPI excluding energy products up to 1995, Norges Bank's estimates for the CPI adjusted for tax changes and excluding energy products from June 1995 to July 2000, thereafter the CPI-ATE. The same deflator is used for 5-year rates, but from 2001 Q2 the inflation target of 2½ per cent is used Sources: Statistics Norway and Norges Bank 5-year rate 3-month rate

38. Source: Norges Bank Chart 3.3 The interest rate in the baseline scenario and forward interest rates in Norway. Quarterly figures. 04 Q1 – 08 Q4 Baseline scenario Forward rates 10 March

39. Interest rate (left-hand scale) Import-weighted exchange rate (I-44) (right-hand scale) Chart 3.4a 3-month money-market rate and import- weighted exchange rate (I-44) 1) 2) in the baseline scenario. Quarterly figures. 04 Q1 – 08 Q4 1) A rising curve denotes a weaker krone exchange rate 2) The figures for 2005 Q1 are based on the average through 10 March Source: Norges Bank

40. Chart 3.4b Projections for the CPI-ATE and output gap in the baseline scenario. Quarterly figures. Per cent. 04 Q1 – 08 Q4 Sources: Statistics Norway and Norges Bank CPI-ATE Output gap

41. Source: Norges Bank Chart 3.5a 3-month money market rate in the baseline scenario and in alternative scenarios with high and low interest rates. Quarterly figures. 04 Q1 – 08 Q4 Baseline scenario Low interest rate High interest rate

42. Chart 3.5b Projections for the CPI-ATE and the output gap in the baseline scenario and in alternative scenarios with high and low interest rates. Quarterly figures. Per cent. 04 Q1 – 08 Q4 Sources: Statistics Norway and Norges Bank CPI-ATE (solid lines) Output gap (broken lines) Baseline scenario High interest rate Low interest rate

43. Chart 3.6 Credit to households (C2) in the baseline scenario and in alternative scenarios with high and low interest rates. Annual percentage change in stock. 2002 – 2008 Source: Norges Bank Baseline scenario High interest rate Low interest rate

44. Interest rate in baseline scenario (left-hand scale) Import-weighted exchange rate (I-44) in scenario with lower inflation (right-hand scale) Chart 3.7a 3-month money-market rate and import- weighted exchange rate (I-44) 1) 2) in scenario with lower inflation. Quarterly figures. 04 Q1 – 08 Q4 Interest rate in scenario with lower inflation (left-hand scale) 1) A rising curve denotes a weaker krone exchange rate 2) The figures for 2005 Q1 are based on the average through 10 March Source: Norges Bank

45. Chart 3.7b Projections for the CPI-ATE and output gap in the scenario with lower inflation. Quarterly figures. Per cent. 04 Q1 – 08 Q4 Sources: Statistics Norway and Norges Bank CPI-ATE Output gap

46. I-44 in scenario with stronger exchange rate (right-hand scale) Chart 3.8a 3-month money-market rate and import- weighted exchange rate (I-44) 1) 2) in scenario with stronger exchange rate. Quarterly figures. 04 Q1 – 08 Q4 Interest rate in baseline scenario (left-hand scale) Interest rate in scenario with stronger exchange rate (left-hand scale) 1) A rising curve denotes a weaker krone exchange rate 2) The figures for 2005 Q1 are based on the average through 10 March Source: Norges Bank

47. Chart 3.8b Projections for the CPI-ATE and output gap in the scenario with a stronger exchange rate. Quarterly figures. Per cent. 04 Q1 – 08 Q4 Sources: Statistics Norway and Norges Bank CPI-ATE Output gap

48. Import-weighted exchange rate (I-44) in scenario with stronger output growth (right-hand scale) Chart 3.9a 3-month money-market rate and import- weighted exchange rate (I-44) 1) 2) in scenario with stronger output growth. Quarterly figures. Per cent. 04 Q1 – 08 Q4 Interest rate in baseline scenario (left-hand scale) Interest rate in scenario with stronger output growth (left-hand scale) 1) A rising curve denotes a weaker krone exchange rate. 2) The figures for 2005 Q1 are based on the average up to 10 March. Source: Norges Bank

49. Chart 3.9b Projections for the CPI-ATE and output gap in the scenario with stronger output growth. Quarterly figures. Per cent. 04 Q1 – 08 Q4 Sources: Statistics Norway and Norges Bank CPI-ATE Output gap

50. Monetary policy rules The Taylor rule: Interest rate = inflation target + equilibrium real interest rate + 1.5 x (inflation - inflation target) + 0.5 output gap The rule was presented in 1993 by Professor John B. Taylor at Stanford University (see Taylor, J.B. (1993): "Discretion versus policy rules in practice", Carnegie-Rochester Conference Series on Public Policy 39, pp. 195-214. In Chart 3.10 we have used the CPI-ATE as a measure of inflation. The Orphanides rule:The Taylor Rule is vulnerable to error in the estimation of the output gap. Athanasios Orphanides, who is a researcher and adviser in the Federal Reserve, therefore proposes the alternative of replacing the output gap with the difference between actual growth and trend growth in the economy (the growth gap). See Orphanides A., R. D. Porter, D. Reifschneider, R. Tetlow and F. Finan (2000) ”Errors in the measurement of the output gap and the design of monetary policy”, Journal of Economics and Business, vol. 52, pp.117-141. Rule with interest rates abroad: Interest rate = 0.5 x Taylor rate + 0.5 x Money market rate among Norway's trading partners.

51. Taylor rate (blue line) Sight deposit rate (red line) Chart 3.10 Sight deposit rate, Taylor rule, Orphanides rule and rule with interest rates abroad. Inflation as in the baseline scenario. Quarterly figures. 99 Q1 – 05 Q2 Orphanides’ rule 1) (yellow line) Rule with interest rate abroad (green line) 1) Norges Bank's projection for growth in mainland GDP one to two quarters earlier forms the basis for the estimates Source: Norges Bank

52. 1) The interest rate movements are explained by developments in inflation, growth in mainland GDP, wage growth and 3-month interest rates among trading partners. A more in-depth account was provided in Inflation Report 3/04 Source: Norges Bank Interest rate movements that follow from Norges Bank's average pattern with a 90% confidence interval (grey area) Sight deposit rate (red line) Chart 3.11 The sight deposit rate and interest rate movements that follow from Norges Bank's average pattern for the setting of interest rates. 1) Quarterly figures. 99 Q2 – 05 Q2

53. Norges Bank`s projections

54. 1) A rising curve denotes a weaker krone exchange rate 2) The figure for 2005 Q1 is based on the average through 10 March Source: Norges Bank Interest rates (left-hand scale) Import-weighted exchange rate (I-44) (right-hand scale) Chart 1 3-month money-market rate and import- weighted exchange rate (I-44) 1) 2) in the baseline scenario. Quarterly figures. Per cent. 04 Q1 – 08 Q4

55. Chart 2 Projected CPI-ATE and output gap in the baseline scenario. Quarterly figures. Per cent. 04 Q1 – 08 Q4 Sources: Statistics Norway and Norges Bank CPI-ATE Output gap

56. Chart 3 Real growth in household disposable income 1) and consumption. Annual figures. Per cent. 1990 – 2008 2) 1) Adjusted for extraordinary share dividends since 2001 2) Projections for 2005 -2008 Sources: Statistics Norway and Norges Bank Real income growth Real growth in consumption

57. 1) Adjusted for extraordinary share dividends since 2001 2) Projections for 2005 - 2008 Sources: Statistics Norway and Norges Bank Chart 4 Households’ net lending as a share of disposable income 1). Annual figures. Per cent. 1980 – 2008 2)

58. Chart 5 Annual wage growth 1) and unemployment rate (LFS). Annual figures. Per cent. 1993 – 2008 2) 1) Average for all groups. Including cost of additional vacation days 2) Projections for 2005 -2008 Sources: Technical Reporting Committee on Income Settlements, Statistics Norway and Norges Bank Unemployment rate Annual wage growth

59. Chart 6 Labour force as a percentage of population aged 16 – 74 (labour force participation rate). Annual figures. Per cent. 1980 – 2008 1) 1) Projections for 2005 -2008 Sources: Statistics Norway and Norges Bank Labour force participation rate

60. Chart 7 CPI-ATE. Total and by supplier sector. 1) 12-month change. Per cent. Jan 02 – Dec 08 2) 1) Norges Bank's estimates 2) Projections from March 05 – Dec 08 Sources: Statistics Norway and Norges Bank Goods and services produced in Norway CPI-ATE Imported consumer goods

61. IR 1/05 Charts for boxes

62. Monetary policy since 3 November

63. Source: Norges Bank Chart 1 Interval for the sight deposit rate at the end of each strategy period and actual developments. Daily figures. Per cent. 1 Nov 02 – 16 Mar 05 Strategy period 1/03 Sight deposit rate Strategy period 2/03 Strategy period 3/03 Strategy period 1/04 Strategy period 3/02 Strategy period 2/04 Strategy period 3/04

64. Recent price developments

65. Chart 1 Prices for some imported consumer goods. 12-month change. Per cent. Jan 02 - Feb 05 Source: Statistics Norway Cars Clothing and footwear Audiovisual equipment

66. Chart 2 Prices for goods and services produced in Norway 1). 12-month change. Per cent. Jan 02 – Feb 05 1) Adjusted for tax changes and excluding energy products. Percentage share of CPI-ATE in brackets. Norges Bank's estimates up to December 2003 2) Excluding energy and agricultural and fish products Sources: Statistics Norway and Norges Bank Consumer goods produced in Norway 2 ) (20) House rents (18) Services with wages as a dominant factor (7) Other services (20)

67. Chart 3 Prices for food and non-alcoholic beverages. 12-month change. Per cent. Jul 02 – Feb 05 Source: Statistics Norway

68. Chart 4 Indicators of underlying price inflation. 12-month change. Per cent. Jan 02 – Feb 05 Weighted median 1) CPI-ATE Trimmed median 2 ) 1) Estimated on the basis of 93 sub-groups of the CPI 2) Price changes accounting for 20% of the weighting base are eliminated Source: Statistics Norway

69. Chart 5 CPI-ATE including and excluding prices for clothing and footwear 1). Monthly change. Per cent. Jun 03 – Feb 05 1) Norges Bank's estimates Sources: Statistics Norway and Norges Bank CPI-ATE CPI-ATE excluding clothing and footwear

70. Chart 6 CPI and CPI-ATE. 12-month change. Per cent. Jan 02 - Feb 05 Source: Statistics Norway CPI CPI-ATE

71. Why are long-term interest rates so low?

72. Chart 1 Government bonds with a 10-year maturity. US, Germany and Norway. Daily figures. Per cent. 3 Jan 00 – 10 Mar 05 Source: EcoWin

73. Chart 2 Long-term inflation expectations and implied 5-year rates 5 years ahead less long-term inflation expectations Sources: EcoWin and Norges Bank Implied 5-year rates 5 years ahead less long-term inflation expectations Inflation expectations

74. Chart 3 12-month rise in the CPI-ATE given different values of the neutral real interest rate, while assuming that it is 3 per cent Sources: Statistics Norway and Norges Bank r*=3 r*=3.5 r*= 2.0 r*=2.5 r*=4.0

75. Chart 4 The output gap given different values of the neutral real interest rate, while assuming that it is 3 per cent r*=2.5 r*=3.5 r*=3r*=4.0 r*=2.0 Source: Norges Bank

76. Developments in household debt

77. Chart 1 3-month money market rate in the baseline scenario and in alternative scenarios with high and low interest rates. Quarterly figures. 02 Q1 – 08 Q4 Source: Norges Bank Baseline scenario Low interest rate High interest rate

78. Chart 2 Rise in house prices. Annual figures. Per cent. 1992 – 2008 1) 1) Projections for 2005 – 2008 Sources: Norwegian Association of Real Estate Agents, Association of Real Estate Agency Firms, Finn.no, ECON and Norges Bank Baseline scenario Low interest rate High interest rate

79. Chart 3 Credit to households (C2). Annual percentage change in household debt. 2002 – 2008 1) 1) Projections for 2005 – 2008 Source: Norges Bank Baseline scenario Low interest rate High interest rate

80. Chart 4 Projections of household debt burden 1). Annual figures. Per cent. 2002 – 2008 2) 1) Loan debt as a percentage of disposable income less the return on insurance claims. 2) Projections for 2005 – 2008 Source: Norges Bank Baseline scenario Low interest rate High interest rate

81. Chart 5 Projections of households' interest burden 1). Annual figures. Per cent. 2002 -2008 2) 1) Interest expenses as a percentage of disposable income less the return on insurance claims plus interest expenses 2) Projections for 2005 – 2008 Source: Norges Bank Baseline scenario Low interest rate High interest rate

82. Evaluation of Norges Bank's projections for 2004

83. Chart 1 CPI-ATE 1). Total and by supplier sector. 2) 12-month change. Per cent. Jan 02 – Feb 05 1) CPI-ATE: CPI adjusted for tax changes and excluding energy products 2) Norges Bank's estimates Sources: Statistics Norway and Norges Bank Goods and services produced in Norway CPI-ATE Imported consumer goods

84. Chart 2 CPI-ATE. Projections for 2004 published at different times. Per cent Sources: Statistics Norway, the Ministry of Finance, DnB NOR, Nordea and Norges Bank Statistics Norway DnB / DnB NOR Nordea Actual inflation in 2004 Norges Bank Ministry of Finance

85. Chart 3 CPI-ATE. Projections in IR 3/04, projections from time series model and actual price movements. 12-month change. Per cent. Dec 03 – Feb 05 Sources: Statistics Norway and Norges Bank Time series model Actual CPI-ATE Projections IR 3/04

86. Chart 4 Projections for the CPI-ATE 1) and the output gap 2) in Inflation Report 3/04 (red) and 1/05 (blue). Per cent 1) CPI-ATE: CPI adjusted for tax changes and excluding energy products 2) The output gap measures the difference between actual and trend mainland GDP Sources: Statistics Norway and Norges Bank CPI-ATE Output gap IR 3/04 IR 1/05

87. Chart 5 Mainland GDP. The last two projections published for 2005. 1) Percentage change 5/0410/0412/04 3/05 11/04 1) The figures under the columns refer to publication month and year Sources: Revised National Budget 2004, National Budget 2005, Economic Survey 4/2004, and 1/2005, Inflation Report 3/2004 and 1/2005

88. Chart 6 CPI-ATE. The last two projections published for 2005. 1) Percentage change 12/04 3/05 11/04 5/0410/04 1) The figures under the columns refer to publication month and year Source: Revised National Budget 2004 National Budget 2005, Economic Survey 4/2004 and 1/2005, Inflation Report 3/2004 and 1/2005

89. Low inflation in the Nordic countries

90. Chart 1 Harmonised indices of consumer prices in the Nordic countries and the euro area. 12-month change. Per cent. Jan 02 – Jan 05 Source: Eurostat Finland Euro area Denmark Norway Sweden

91. Annex

92. 1) The money market rate is normally about ¼ percentage point higher than the sight deposit rate. Sources: EcoWin and Norges Bank Sight deposit rate 3-month money market rate Chart 1 Norwegian interest rates. 3-month money market rate, sight deposit rate 1) and 10-year government bond yield. Monthly figures. Jan 95 – Feb 05 10-year government bond yield

93. 1) Theoretical ECU rate up to and including December 1998 Sources: EcoWin and Norges Bank Euro area 1) US Japan Chart 2 3-month interest rates in the US, the euro area and Japan. Monthly figures. Jan 95 – Feb 05

94. Sources: EcoWin and Norges Bank UK Sweden Chart 3 3-month interest rates in the UK, Sweden and among trading partners. Monthly figures. Jan 95 – Feb 05 Trading partners

95. Import-weighted exchange rate, I-44 (1995=100) Trade-weighted exchange rate index, TWI (1990=100) Chart 4 Trade-weighted exchange rate index (TWI) and import-weighted exchange rate (I-44). 1) Monthly figures. Jan 95 – Feb 05 1) A rising curve denotes a weaker krone exchange rate. Sources: EcoWin and Norges Bank

96. NOK/EUR (left-hand scale) NOK/SEK (right-hand scale) Chart 5 Bilateral exchange rates. Monthly figures. Jan 95 – Feb 05 NOK/USD (left-hand scale)

97. Source: Norges Bank Credit to households C2 Chart 6 The credit indicator (C2), credit to households and total credit to the non- financial private sector and municipalities, mainland Norway (C3). 12-month change. Per cent. Jan 97 – Jan. 05 C3 mainland Norway

98. 1) The money market rate is normally about ¼ percentage point higher than the sight deposit rate. Source: Norges Bank 3-month money market rate Interest rate in the baseline scenario Assumption for money market rate 1). Quarterly figures. 01 Q1 – 08 Q4

99. The krone exchange rate (I-44) 1). Forward exchange rate. Monthly figures. Jan 01 – Dec 08 Import-weighted exchange rate, I-44 Forward exchange rate 10 March 1) A rising curve denotes a weaker krone exchange rate. Source: Norges Bank