In other countries, such as Italy, where competitiveness fell sharply prior to the crisis, there has so far been no evident correction of competitiveness. In other words, the pace of adjustment has been different across countries; imbalances have not been corrected everywhere to the same extent. [Slide 5] Finally, we have observed a very strong improvement in structural primary fiscal balances – that is, fiscal balances adjusted for the economic cycle and for one-off factors. In Greece, the structural primary balance in percent of GDP, which had reached extremely high levels in 2009, is estimated to have improved by more than 13 percentage points cumulatively between 2009 and 2012. In Portugal, the structural improvement has been  2  See ECB Monthly Bulletin Article (2011), The ECB’s non-standard measures – impact and phasing out, July 2011, pages 55-69. 3  Cheptea, Fontagne and Zignago (2012), European Exports Performance, Banque de France WP 393. 4  Buti, M, and A. Turrini (2012), Slow but steady? Achievements and shortcomings of competitive disinflation within the euro area, ECFIN economic brief, Issue 16, November. BIS central bankers’ speeches  3  about 6 percentage points of GDP. These improvements give an idea of the real adjustment effort made by these countries. [Slide 6] But being cautiously optimistic does not mean that there are no major challenges or tasks ahead of us. Indeed, the economic and social priority is to reduce the very high unemployment level.
According to Statistics Norway’s business tendency survey, the shortage of labour and intermediate goods is now at a higher level than during the booms in the 1980s and 1990s. The strong rate of growth has only to a limited extent fed through to a higher rise in prices for consumer goods and services. Consumer price inflation adjusted for tax changes and excluding energy products (CPI-ATE) has admittedly picked up gradually since late summer 2006, but in relation to the economic situation, underlying inflation remains low. The year-onyear rise in the CPI-ATE was 1.4 per cent in July. Other measures of underlying inflation show approximately the same rise in prices. According to our assessment, underlying inflation is between 1 and 1½ per cent, as it has been for a longer period. The year-on-year rise in the total consumer price index (CPI) has been just under ½ per cent in recent months. This is because electricity prices have been substantially lower this year than in 2006, when unusually high electricity prices due to low precipitation levels pushed up the year-on-year rise in the CPI close to the inflation target. In recent months, electricity prices have been at their lowest level since 2002. There are probably a number of reasons why inflation has been low in an environment of high economic growth. First, Norway’s terms of trade have improved. Prices for oil and gas, freight, fish, industrial commodities and engineering products have increased considerably. In addition, market growth abroad has provided market opportunities for Norwegian export goods.