svein gjedrem : the economic situation and monetary policy in norway speech by mr svein gjedrem, governor of norges bank ( central bank of norway ), for norges bank ’ s regional network, arranged by kunnskapsparken bodø, in sandnessjøen, 4 september 2006. please note that the text below may differ slightly from the actual presentation. the address is based on the assessments presented at norges bank ’ s press conference following the executive board ’ s monetary policy meeting on 16 august and inflation report 2 / 06. * * * the economic situation the cyclical upturn in the norwegian economy continues. corporate sector profitability is solid. companies are borrowing and investing. employment is rising at a fast pace, unemployment is falling and household demand is still on the increase. capacity utilisation in the economy is rising and a growing number of enterprises are facing constraints. statistics norway ’ s business tendency survey for the second quarter is still giving positive signals regarding developments in norwegian manufacturing. a clear majority of industrial leaders assess the general outlook for the third quarter as more positive than for the second quarter. at the same time, consumer price inflation excluding energy products remains low and is lower than the inflation target. norges bank seeks to set the interest rate with a view to achieving a reasonable balance between the objective of stabilising inflation at target and the objective of stabilising developments in output and employment. flexible inflation targeting builds a bridge between the long - term objective of monetary policy, which is to keep inflation on target and provide an anchor for inflation expectations, and the more short - term objective of stability in the real economy. low inflation in recent years is both the result of monetary policy assessments and unforeseen disturbances to the economy. towards the end of 2002, norges bank shifted its monetary stance in an accommodative direction as new information indicated that developments in output and unemployment might be weaker than projected and inflation might be lower than target. the key rate was reduced markedly in 2003 and 2004. the low interest rate level has contributed to a considerable increase in demand for goods and services. increased petroleum investment and favourable prices in markets for our export products have also made a contribution. so far in this cyclical upturn the mainland economy has expanded by an average of close to 4 per cent. wage developments reflect and influence the business cycle. strong employment growth in the 1990s resulted in a rise in labour costs, which in turn

ida wolden bache : the policy rate will likely be kept unchanged to the end of the year introductory statement by ms ida wolden bache, governor of norges bank ( central bank of norway ), at the press conference following norway's announcement of the policy rate, oslo, 7 november 2024. * * * presentation accompanying the speech chart : policy rate kept unchanged at 4. 5 percent the monetary policy and financial stability committee has decided to keep the policy rate unchanged at 4. 5 percent. norges bank is tasked with keeping inflation low and stable. the operational target is inflation of close to 2 percent over time. we are also mandated to help keep employment as high as possible and to promote economic stability. after inflation surged two and half years ago, we have raised the policy rate significantly, and since december last year the policy rate has been held at 4. 5 percent. the interest rate has contributed to cooling down the economy and to dampening inflation. if the economy evolves as currently envisaged, the policy rate will be held at today's level to the end of the year. at the same time, we are approaching the time to lower interest rates. the forecast presented at the previous monetary policy meeting in september, indicated that the policy rate would be gradually reduced from the first quarter of next year. we have not made new forecasts for this monetary policy meeting, but the overall outlook for the norwegian economy does not appear to have changed materially since september. chart : international inflation has declined markedly from its peak internationally, central banks appear to have tackled inflation without large costs in the form of high unemployment. in many trading partner countries, inflation is now back at around 2 percent. many central banks have started reducing their policy rates. markets expect further rate cuts internationally over the next year but not to the same extent as in september. us interest rates have risen sharply in recent weeks. chart : inflation is moving down the inflation outlook for norway also indicates that we will be able to return inflation to target without a large increase in unemployment. inflation has declined markedly from its peak and has slowed faster than projected over the past year. consumer price inflation peaked at 7. 5 percent and is now down to 3 percent, which is a little lower than we envisaged in september. 1 / 2 bis - central bankers'speeches but inflation is still above our target, and we expect that some factors will restrain further disinflation. wage growth is high, and combined