Households probably need to build up financial buffers and reduce debt, which will in turn weigh down on growth in private consumption ahead. Growth in spending on goods stalled last autumn. There has been a considerable drop in car sales in particular. Norges Bank’s regional network also reports a decline in demand for goods related to moving home, such as white and brown goods and refurbishing equipment. Growth in consumption is expected to be very low for a period ahead, but growth in private consumption may pick up again towards the end of next year. Growth in mainland investment has been strong in recent years, but is now moderating. According to the national accounts, corporate investment was still on the rise in the first half of the year, but there was a considerable decline in housing investment. Falling housing starts, reduced order reserves and assessments from the enterprises in Norges Bank’s  4  BIS Review 143/2008  regional network indicate that housing investment will continue to show a pronounced fall next year. Gross investment is expected to decline by 14 per cent on an annual basis in 2009, remain at a low level in 2010 before picking up in 2011. Even though the krone depreciation is curbing the impact, the global downturn is expected to result in lower growth in Norwegian exports. The high level of petroleum investment was an important driving force during the economic upturn, and petroleum investment is expected to remain high in the years ahead.
The fallout has been particularly pronounced in the US, but European interest rates have also risen sharply. The flow of dollars among banks has seized up at times. Other than central bank measures to supply liquidity to banking systems, the authorities in the US and Europe first approached the financial crisis as a succession of problems at individual institutions. In the US, a general package was adopted by Congress on Friday 3 October. USD 700 billion was allocated for purchasing illiquid assets from financial institutions. On 8 October, the UK government announced a number of measures to stabilise financial markets, but with emphasis on providing risk capital. Euro area countries followed suit and on 12 October agreed to take similar action. On 12 November, the strategy for the  BIS Review 143/2008  1  US crisis package of USD 700 billion was changed to provide the authorities with the scope to inject capital into banks and other financial institutions. There is unusually high uncertainty surrounding economic developments ahead. This is reflected in equity markets among other things. Since spring, stock indices have plummeted both abroad and on the Oslo Stock Exchange. The Oslo Stock Exchange has declined by more than 50 per cent since the peak in May. On 8 October, the central banks in the US, the UK, Canada, the euro area, Switzerland and Sweden implemented coordinated interest rate cuts. The central bank of China also reduced its key rate.