Weaker money supply growth

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The twelve-month growth in the monetary aggregate M3 was 2.8 per cent to end-September 2018, down from 3.3 per cent to end-August. Households’ growth in M3 was 5.2 per cent to end-September, down from 5.3 per cent the previous month.

Written by: Eirin Ingvaldsen Brynestad

The twelve-month growth in households’ money supply was lower than the growth in households’ domestic debt, which was 5.9 per cent to end-September according to the credit indicator C2.

The money supply growth for non-financial corporations was -1.1 per cent to end-September, while the growth for municipal government was 0.5 per cent. The money supply growth for other financial corporations was 2.7 per cent to end-September, according to new figures from the Monetary aggregates statistics.

Figure 1. Monetary aggregate M3. Twelve-month growth

Money-holding sector Households Non-financial corporations
Sep. 2011 8.6 7 8.2
Oct. 2011 8.5 6.3 9
Nov. 2011 7.7 7 5.5
Dec. 2011 6.4 7.9 4.6
Jan. 2012 6 7.6 3.5
Feb. 2012 6.3 7.7 4.8
Mar. 2012 6.8 8.7 3
Apr. 2012 5.2 8.3 0.2
May 2012 3.3 8.6 -4.2
June 2012 5.7 8.8 1.2
July 2012 5.2 7.9 2
Aug. 2012 5.3 8.5 -0.5
Sep. 2012 5 8.8 -0.9
Oct. 2012 4 7.3 -0.8
Nov. 2012 5.3 7.2 3.2
Dec. 2012 4.8 6.8 1.4
Jan. 2013 4.9 6.8 2.1
Feb. 2013 3.8 6.5 -0.5
Mar. 2013 3.8 6.3 -0.5
Apr. 2013 4.1 5.8 1.3
May 2013 6.1 5.9 6
June 2013 4.7 6 2.8
July 2013 5.2 5.8 4.3
Aug. 2013 6.1 6.5 8.3
Sep. 2013 4 5.7 4.3
Oct. 2013 4.5 6.1 4.5
Nov. 2013 4.2 6.4 3.1
Dec. 2013 6.1 6.3 5.9
Jan. 2014 5.2 6.3 5
Feb. 2014 5.7 6.4 6
Mar. 2014 5.8 5.8 8.4
Apr. 2014 6.3 6.5 6.2
May 2014 5.4 6.7 3.7
June 2014 6.8 6.2 5.6
July 2014 5.3 6.3 2.9
Aug. 2014 5.9 6.6 3.8
Sep. 2014 6.4 6.6 5.6
Oct. 2014 5.4 6.5 5.2
Nov. 2014 5.7 7 4.3
Dec. 2014 5.5 7.4 4.5
Jan. 2015 5.6 7.2 3.9
Feb. 2015 4.9 7.2 2.1
Mar. 2015 6 6.7 6
Apr. 2015 4.9 6.7 3.6
May 2015 5.7 7.4 6.5
June 2015 4.6 6.3 5.1
July 2015 5.6 6.2 7.5
Aug. 2015 3.5 5.7 1.5
Sep. 2015 4.6 5.8 4.1
Oct. 2015 5.5 6.2 3.3
Nov. 2015 4.1 5.2 3.1
Dec. 2015 3.1 5.1 0.7
Jan. 2016 3.1 5.5 0.6
Feb. 2016 4.4 5.1 5
Mar. 2016 3.6 5.4 0.7
Apr. 2016 5.3 5.8 5.7
May 2016 3.2 4.6 0.6
June 2016 4.6 5.3 2.6
July 2016 4.6 5.8 2
Aug. 2016 5.8 5.2 6.9
Sep. 2016 6.8 5.3 8.3
Oct. 2016 6.2 4.9 9.2
Nov. 2016 6.6 5.1 9.3
Dec. 2016 5.4 4.1 8.2
Jan. 2017 6.5 3.1 11.6
Feb. 2017 6.6 3.4 11.6
Mar. 2017 7.4 3.5 15.4
Apr. 2017 7.1 3.6 12.7
May 2017 7.4 3.7 15.5
Jun. 2017 7.1 3.8 15.4
July 2017 7.7 3.2 15.4
Aug. 2017 6.7 3.5 12.7
Sep. 2017 6.4 4 11.8
Oct. 2017 6.7 4.1 11.4
Nov. 2017 6.5 4.1 9.8
Dec. 2017 6.3 4.4 7.7
Jan. 2018 5 3.9 5.8
Feb. 2018 3.6 4.3 2.5
Mar. 2018 3.6 5.3 0.6
Apr. 2018 4.1 4.5 3.3
May 2018 4.8 4.8 4.2
Jun. 2018 4 5.4 2.6
July 2018 3 5 1.7
Aug. 2018 3.3 5.3 0.9
Sep. 2018 2.8 5.2 -1.1

More than half of M3 held by households

The monetary aggregate M3 was NOK 2 259 billion at the end of September, up from NOK 2 250 billion the previous month. More than half of M3 is held by households. At end-September this amounted to NOK 1 300 billion, down from 1 303 billion the previous month. 

The money supply for non-financial corporations was NOK 716 billion at end-September, down from NOK 721 billion the previous month. The money supply for municipal government and other financial corporations amounted to NOK 108 billion and NOK 134 billion respectively.

Steady composition of the money supply

The composition of the money supply remains steady. Transaction deposits accounted for 91.1 per cent of the total money supply, while other deposits accounted for 6.8 per cent at the end of September. Notes and coins accounted for 1.8 per cent, while repurchase agreements, debt securities and bonds in total accounted for 0.3 per cent of the money supply at end-September.

Adaption to IFRS

Norwegian financial institutions’ reporting to ORBOF (reporting of banks, mortgage companies, state lending institutions and finance companies’ accounts to the public authorities) has been adapted to IFRS (International Accounting Standards). The most important impact for the Monetary Aggregates Statistics is that accrued costs are to be applied to the underlying financial instrument.

With this change some deposits have been reclassified by the financial institutions implying that some deposits that previously were excluded from the monetary aggregates now are included. In addition, some deposits have been moved from other deposits to transaction deposits. These changes are not caused by new definitions but a consequence of more accurate classification of different types of deposits.

The calculation of transactions and growth is adjusted for these changes.

There is some uncertainty associated with the quality of data as of January 2018. The data is edited continuously and will be updated with the next release of data.

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