in today ’ s situation, the forward guidance is intended to signal low interest rates for an extended period of time in order to sustain inflation and boost growth. other unconventional monetary policy actions are also in use. with large - scale securities purchases, the central banks in the us, the uk and japan have sought to reduce long - term interest rates and thereby funding costs for firms and households. the provision of liquidity has also led to higher equity and securities prices. the us federal reserve started tapering asset purchases last year, resulting in a slight, renewed increase in long - term interest rates. chart 4 : gdp for trading partners growth among our trading partners picked up in the latter half of 2013, particularly in the us. although euro - area growth has also improved, unemployment and debt levels remain elevated. emerging economies are growing at a clearly faster pace than advanced economies, but the pace has slackened somewhat. a number of emerging economies have bis central bankers ’ speeches been affected by capital outflows and currency depreciation. the tapering of asset purchases by the us federal reserve has likely also contributed to these developments. countries with large current account deficits are particularly hard hit. chart 5 : consumer prices abroad inflation has fallen in many countries over that past few years. euro area inflation fell to a very low level in 2013, fuelling fears of deflation. however, a portion of the decline in inflation is related to developments in food and energy prices. furthermore, the decline has been most pronounced in periphery countries. in those countries, negative or very low price growth reflects a need for improving competitiveness. in the core countries, such as germany and france, inflation has remained on a steadier course. long - term inflation expectations seem to be firmly anchored in most advanced economies. chart 6 : gdp for mainland norway growth in the norwegian economy slowed through 2013. the slowdown was most pronounced in the construction and oil supplier industries. some export industries were also affected by weak demand in europe and high cost levels. growth in household demand was moderate in 2013. household saving increased further and is now at a historically high level. unemployment edged up through 2013. capacity utilisation in the economy is still assessed to be close to a normal a level. chart7 : the krone exchange rate after appreciating over a longer period, the krone showed a pronounced weakening in 2013. both domestic and international conditions contributed to the depreciation. signs of weaker growth in the norwegian economy probably

high. petroleum investment is also high. on the other hand, we expect to see weak developments in exports and for example in investment in commercial buildings. the norwegian krone has appreciated markedly this year. developments in wage settlements have probably been an important driving force. high wage growth leads to high interest rates, making it attractive to take krone positions. as a result, the norwegian krone appreciates. we must be prepared for fluctuations in the krone exchange rate in line with that observed in other countries. there is free trade in goods and services and free capital movements. the krone is floating. this means that economic agents cannot assume that the krone will be stable against the euro, against the dollar or against a weighted average of foreign currencies. the krone does not fluctuate any more or less than other currencies. a large share of petroleum revenues is invested in foreign equities and bonds through the petroleum fund. changes in oil prices influence the size of the fund, but have little effect on the domestic use of petroleum revenues. the petroleum fund thus serves as a buffer against fluctuations in oil prices and shields the krone exchange rate. nevertheless, we have been prepared for fluctuations in the krone exchange rate on a par with changes in other countries. over the last two years, the appreciation of the krone has been driven by the wide and increased interest rate differential between norway and other countries, which reflects the relatively high level of wage growth in norway. the interest rate differential reflects high demand growth and high wage growth. there is a clear relationship between wage growth, interest rate expectations and the krone exchange rate. the appreciation of the krone dampens inflation, and at the same time weakens profitability, employment and the capacity to cover labour costs in the internationally exposed sector. the krone can move in both directions. it will not appreciate indefinitely. sustained lower wage growth will be accompanied by a narrower interest rate differential and it may reverse movements in the exchange rate. a declining level of wage growth would provide a strong impetus to the internationally exposed sector. the interest rate could be reduced. this would lead to a depreciation of the krone, with a further improvement in earnings and employment. over the last thirty years, manufacturing has been scaled back in waves. there was substantial downscaling in the years from 1977 to 1984 and 1987 to 1992 in particular. in the years leading up to the periods of contraction, profitability deteriorated in the manufacturing