The money supply M2, May 2007

Following a decrease from March to April, the twelve-month growth increased again in May. However, the twelve-month growth was lower than the growth in March (17.1 per cent), which was the highest in more than ten years. Households, municipalities and other financial corporations contributed to the increase in May, while non-financial enterprises contributed to dampen the growth.

Declining growth in non-financial enterprises

Non-financial enterprise money supply amounted to NOK 467 billion at end-May. Twelve-month growth was 30.3 per cent, down from 32.4 per cent in the previous month. The twelve-month growth has now been above the 30 per cent mark in every month of the last year. Since the beginning of 2006, non-financial enterprises have been the main contributor to the total growth in money supply, accounting for almost 60 per cent of this growth at end-May. The high growth may be related to the high turnover and profitability in business and industry. As shown by the credit indicator C2 , the growth in enterprise gross debt was also high (20.9 per cent).

Household money supply on the rise

Household money supply amounted to NOK 679 billion at end-May. Twelve-month growth in household money supply increased from 6.6 per cent to 8.0 per cent during May. The growth in household money supply is still considerably lower than the growth in household gross domestic debt (12.1 per cent), as shown by the credit indicator C2 . For more information about the financial position of households, see the financial accounts in the national accounts .

Bank deposits - the dominating component

The broad monetary aggregate M2 amounted to NOK 1 306 billion at end-May, of which the major part (about 90 per cent) was bank deposits. In comparison, notes and coins only amounted to 3-4 per cent of the broad money. The rest of the broad money mainly consisted of shares in money market funds (about 6 per cent), while certificates of deposits amounted to less than 1 per cent.

Revisions

The figures have been revised due to the latest release of the quarterly mutual funds statistics , which are used to estimate monthly figures for shares in money market funds. In addition, since March 2007, the figures have been affected by the implementation of the IFRS, the new international financial reporting standards.