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The economic outlook
Governor Øystein Olsen
Norges Bank
4 April 2013
Emerging economies are driving oil demand
Cumulative growth since 1994.1) Millions of barrels per day.
25
25
China
20
20
Other emerging economies
OECD
15
15
10
10
5
5
0
0
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
1) Forecasts for 2013 and 2014
Sources: EIA and Norges Bank
2
Strong improvement in terms of trade
10-year moving average. Annual change. Percent
10
10
8
8
6
6
4
4
2
2
0
0
-2
-2
-4
-4
-6
-6
-8
1900
-8
1920
1940
1960
1980
2000
Sources: Statistics Norway and Norges Bank
3
Public debt – highest since WWII
Advanced economies. Debt to GDP ratio.1) 1900 - 2011
120
120
100
100
80
80
60
60
40
40
20
20
0
1900
0
1920
1) 2011 USD GDP-weighted average
1940
1960
1980
2000
Source: IMF
4
Euro area crisis – less fear
Yield spreads against Germany. 10-year government bonds. Percentage points
7
7
6
Spain
6
5
Italy
5
4
4
3
3
2
2
1
1
0
2010
0
2011
2012
2013
Source: Thomson Reuters
5
Government Pension Fund Global
Market value at end of month.1) In billions of NOK
4 500
4 500
4 000
4 000
3 500
3 500
3 000
3 000
2 500
2 500
2 000
2 000
1 500
1 500
1 000
1 000
500
500
0
1998
0
2000
2002
2004
2006
1) Figures for October 2012 – February 2013 unrevised
2008
2010
2012
Source: Norges Bank
6
Rise in consumer prices
10-year moving average. Percent. 1990 - 2012
8
8
Consumer price inflation (CPI)
6
6
2.5 %
4
4
2
2
0
1990
0
1993
1996
1999
2002
2005
2008
2011
Source: Statistics Norway
7
Divergence in manufacturing
Production. 2005 = 100
175
175
Total manufacturing production Norway
150
Manufacturing production OECD
150
Engineering industry Norway
125
Other manufacturing subsectors Norway
125
100
75
2000
100
75
2002
2004
2006
2008
2010
2012
Sources: Statistics Norway and OECD
8
Norwegian labour is expensive
Unit labour costs in a common currency. 2000 Q1 = 100
180
180
Ireland
Norway (mainland)
160
160
Spain
Sweden
140
Germany
140
120
120
100
100
80
2000
80
2002
2004
2006
2008
2010
2012
Sources: OECD, Statistics Norway and Norges Bank
9
Mainland GDP – stable nominal growth
1994 = 100. Linear trend 1990 – 2006. Logarithmic scale
400
400
300
300
200
200
100
100
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Sources: Statistics Norway and Norges Bank
10
Mainland GDP – slump in economic activity
Volume. 1994=100. Linear trend 1990-2006. Logarithmic scale
200
200
150
150
100
100
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Sources: Statistics Norway and Norges Bank
11
Mainland GDP – per capita
Volume. 1994=100. Linear trend 1990-2006. Logarithmic scale
200
150
200
150
100
100
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Sources: Statistics Norway and Norges Bank
12
Employment ratio is high, but hours worked
are low
Employment rate as percentage of working-age population. Percent. 2011
80
Employment ratio1)
Employment ratio adjusted for working hours 2)
OECD: Average employment ratio adjusted for working hours
75
80
75
70
70
65
65
60
60
55
55
50
50
45
45
Norway
Sweden Denmark Germany
Finland
US
1) Proportion of working-age population (15-64 years) that is employed
2) Hours worked per person (15-64 years), as share of normal working year of 1750 hours
Similar analysis has also been done by Hilde C. Bjørnland
Italy
Greece
Sources: OECD and Norges Bank
13
Productivity growth has declined
Change in gross value added per unit of labour. Constant prices. 5-year
moving average
3,5
3,5
Norway
3,0
3,0
Trading partners
2,5
2,5
2,0
2,0
1,5
1,5
1,0
1,0
0,5
0,5
0,0
0,0
1980
1985
1990
1995
2000
2005
2010
Sources: Statistics Norway, TBU, OECD and Norges Bank
14
High employment growth in labour-intensive sectors
Growth. 1000s person years. 2000 - 2012
Health and social services
Construction
Wholesale and retail trade
Technical services
Commercial services
Public administration and defence
Manufacturing
-50
0
50
100
150
Source: Statistics Norway
15
The economic outlook
Governor Øystein Olsen
Norges Bank
4 April 2013