owing to increased availability of shale gas in the us, a higher supply of lng and low demand in europe. futures prices indicate some rise in other commodity prices. metal prices have risen as a result of improved global growth prospects, but they are still somewhat lower than in summer 2008. key rates are close to zero in many countries. a number of central banks have signalled that key rates will be kept low for an extended period, and key rate expectations abroad fell through autumn and winter. market participants do not anticipate a rise in key rates in the us, the euro area and the uk until the end of 2010. the interest rate differential between norway and trading partners has increased. the krone exchange rate has remained fairly stable through winter, although it is somewhat stronger than projected in october. the krone is expected to remain at about the current level to the end of the third quarter and then gradually depreciate somewhat thereafter. growth in the norwegian economy came to a halt in autumn 2008, and norway entered a downturn in early 2009. the decline appears to have ended in the second quarter of 2009. capacity utilisation is lower than normal, but the downturn seems to be relatively mild. activity has been underpinned by substantial interest rate cuts combined with higher public spending and high oil investment. fiscal policy was very expansionary in 2009. petroleum revenue spending increased sharply, and by close to 3 per cent of mainland gdp. revenue spending will rise further this year. our projections are based on information from the final budget and the projections in the national budget for 2010. in line with this, the level of the structural, non - oil budget deficit is maintained at this level to the end of the projection period. according to the fiscal rule, the fiscal deficit should be reduced to about 4 per cent of the capital in the government pension fund global ( gpfg ) when the economy resumes a normal level of activity. if economic developments are broadly in line with projections, a fiscal stance in line with the fiscal rule could result in a lower interest rate and a weaker krone than projected. the government has estimated that the annual return on the fund will be around 4 per cent over time. the average real return since the management of the fund began is now 2. 7 per cent, up from just 1 per cent a year ago. the figure reflects the recent recovery from the sharpest deterioration in capital markets since world war ii. with an unchanged risk profile, the average

. the norwegian author alexander kielland depicts the local financial bubble in stavanger in the 1880s in his book fortuna. there was a surge in credit growth and speculation in commercial bills that did not represent actual values. speculation formed the basis for quick gains and it all ended in bankruptcies and banks that failed. one of the see borlaug ( 1999 ), pp 34 - 35 for more details on the minsky moment, see www. newyorker. com / talk / comment / 2008 / 02 / 04 / 080204taco _ talk _ cassidy. for a further account of the tulip bubble in holland, see nou 1999 : 29 ” commodity derivatives ”, p 53. climaxes in the book is a scene where taraldsen – the old messenger from norges bank – realises that the financial bubble is about to burst : … in breathless surprise taraldsen asked again : " aren't your bills of exchange to be redeemed today? " " no. " " mr. marcussen! people say that you are a jocular man ; but this – " " i'm not joking – damn it! " old taraldsen straightened up ; everyone was hunched over their work ; only young rasmus'eyes met his. the boy was white as a sheet ; he began to understand. it also started to become clear for old taraldsen ; but immediately afterwards, he became very confused again ; because he understood the entire scope of this ; he had the entire town's bills of exchange in his head ; and of course he had seen a lot of this kind of thing during his long life but all of those were trifles compared to what would happen now. his voice shook as he almost ceremoniously asked : " will carsten løvdahl's papers be protested? " " yes, " replied marcussen without looking up. old taraldsen trotted out of the offices ; but on the steps he met the messenger from aktiebanken : " is it true? – taraldsen! " " now the entire town is going to collapse, " answered the old man, throwing up his arms in despair. kielland ’ s description of a financial crisis and its consequences was realistic. there was speculation then and there is speculation today, but in other kinds of financial instruments than at that time. we might find employees at lehman brothers today who have expressed themselves in the same way as