and the labour market is becoming tighter more quickly than expected. higher growth in the economy may in isolation suggest a faster increase in the interest rate ahead. this would reduce the risk of bottlenecks in the economy, with rising cost inflation and continued debt build - up. on the other hand, the objective of bringing inflation up towards the target and anchoring inflation expectations argues for restraint in the upward movement of interest rates. norges bank ’ s executive board decided at its meeting on 16 march to raise the sight deposit rate by 0. 25 percentage point to 2. 50 per cent. the current assessment indicates an interest rate path where the interest rate is raised by about 1 percentage point this year, in line with expectations in the market. the sight deposit rate should be in the interval 2¼ – 3¼ per cent in the period to the publication of the next inflation report on 29 june 2006, conditional on economic developments that are broadly in line with the projections. uncertainty surrounding the interest rate reflects the monetary policy response to unexpected disturbances to inflation, output and the exchange rate. we have illustrated the uncertainty surrounding forecasts for the interest rate, inflation and the output gap with fan charts. the width of the fan charts is based on historical disturbances. however, there is no certainty that future disturbances will be of the same nature and scale. the wider the fan charts are, the more uncertain the projections. conclusion increased globalization and the ensuing terms of trade improvements have exposed the norwegian economy to a significant upward income shock. this has magnified the domestic upswing. so far, however, strong growth impulses have not led to major imbalances or strong upward price pressures. this may be seen as an indication that the macroeconomic framework, most notably the fiscal and monetary policy regimes, has been quite successful so far in shielding the norwegian economy from excessive fluctuations. more importantly, while we adhere to the macroeconomic framework it will shield the economy when oil prices fall and our terms of trade are reversed. thank you for your attention!

##ecd area. many are seeking new opportunities and work in the urban areas. low labour costs and more efficient transport and communication attract labour - intensive production. production of goods and services is being transferred from norway and other high - cost countries to amongst others the baltic countries, poland, china, india or other emerging economies. there are many examples showing that competition in selling highly skilled services is also intensifying. norwegians are offered myopia surgery in turkey. dental care and other medical services are also offered, at prices that are substantially lower than here. the norwegian oil and gas company norsk hydro reports that almost 300 000 hours of engineering services for the natural gas field ormen lange were supplied by indian engineers, located in india. the shift in the division of labour is now influencing real wage growth in industrialised countries. the risk that a business will have to wind up operations or move abroad is dampening costs as bargaining power is being transferred from workers to employers. in a number of european countries, wage growth is also being influenced by labour inflows from the new eu member states. increased trade has engendered higher demand for shipping services and favourable freight rates for a period. this has in turn led to a boom in the shipbuilding industry. at the same time, high energy prices are boosting investment in the petroleum and electricity sectors, with considerable impetus to the engineering industry. growth in asia is also having a favourable impact on many metal prices. norway ’ s terms of trade are improving. prices for our imported goods are falling in relation to prices for goods we export. the impact of the rise in oil and gas prices is particularly strong, but the terms - oftrade gains for the mainland economy have also been high. the situation in norway differs from that of its nordic neighbouring countries. sales of swedish and finnish high - tech products are growing strongly in volume terms, but prices are falling. denmark has a diversified business sector, which is overall moving on a steady path. strong development in the petroleum sector high oil prices have provided a strong impetus for the petroleum industry and have led to a strong increase in activity on the norwegian continental shelf. many projects have been launched to increase recovery from fields in operation, and investment in the petroleum sector has increased sharply. the large development projects relating to the natural gas fields snøhvit outside of hammerfest and ormen lange at aukra have made a large contribution to the high level of investment. both these projects also involve considerable