Evaluation of Norges Bank's Projections for 2004

The assessments of capacity utilisation in the Norwegian economy in 2004, measured by estimates of the output gap, changed only moderately through 2003 and 2004. For the past year, Norges Bank has projected that the Norwegian economy was approaching normal capacity utilisation towards the end of 2004. In the Inflation Reports in 2003, the rise in the consumer price index adjusted for tax changes and excluding energy products (CPI-ATE) was projected to move up by 2 per cent cent in 2004. The projection was revised downwards to ½ per cent in the March 2004 Inflation Report. Price inflation in 2004 was substantially lower than projected in 2002–2003, but the projections in the 2004 were close to the mark in relation to actual developments