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EcPoFi
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A. Willems, CFA, publisher of ecpofi.com and economicsnexus.com, is an equity investor with a long-term view investing in undervalued listed shares with solid operational track records and sensible balance sheets.
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EcPoFi - Economics, Politics, Finance
  • Norwegian Base Money Increases 22.3% In September 0 comments
    Oct 31, 2012 8:03 AM

    Base money in Norway increased 22.3% on August to NOK 98.598 billion according to figures for September released today by Statistics Norway. Base money for the month however decreased 10.5% on September last year and the reason appears to be the increase in M2 to M0 money multiplier during the last nine months (otherwise growth in money supply would have been "too high").

    M1 money supply was up 1.5% on August and up 3.5% on September last year while M2 money supply increased 0.8% on August and 4.4% on September last year. On a 12 month moving average basis (YoY percentage change), base money is up an average of 2.6%, M1 is up 4.7% and M2 is up 5.5%. The longer term trend therefore shows money supply in Norway increasing fairly rapidly.

    Statistics Norway explained the increase in money supply as follows,

    Households' money supply constitutes more than half of the total money supply. At end-September it accounted for NOK 966 billion, down from NOK 967 billion the previous month. The twelve-month growth in households' money supply increased from 8.2 per cent to end-August to 8.5 per cent to end-September.

    The growth in households' money supply was higher than the growth in households' gross domestic debt, which amounted to 7 per cent to end-September, according to the credit indicator C2.

    Non-financial enterprises' money supply amounted to NOK 540 billion at end-September, up from NOK 535 billion at end-August. The twelve-month growth decreased from 0.1 per cent to end-August to -0.3 per cent to end-September. Non-financial enterprises' money supply constituted 30.7 per cent of the total money supply and 39.5 per cent of their gross domestic debt measured by the credit indicator C2 at end-August.

    Municipal government's money supply amounted to NOK 78 billion at end-September, up from NOK 68 billion the previous month. The twelve-month growth rate was 8.5 per cent to end-September, up from 7.9 per cent to end-August.

    Other financial enterprises' money supply amounted to NOK 175 billion at end-September, marginally up from NOK 174 billion at end-August. The twelve-month growth was -3.2 per cent to end-September, down from 1.3 per cent the previous month.

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    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: Macro View, Monetary Policy, Norway
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