Inflation expectations down to 3-year low!
The Reserve Bank of New Zealand is likely pleased with the decline in one- and two-year ahead inflation expectations, especially the two-year measure near the midpoint of the 1% to 3% target band.
Articles written by leading NZ economist about General economic
Labour market cooling evident
If further labour market weakness is coupled with any significant downward surprises in inflation or economic performance then the Reserve Bank could begin to consider initiating OCR cuts earlier than anticipated.
Domestic inflationary pressures persist
Inflation to March was 4.0%pa, down from 4.7%pa in December - its lowest rate since June 2021. At first blush, this appears to be a great result and, while lower inflation is something to celebrate, there were still pockets of concern.
NZ’s abysmal productivity record continues
Labour productivity fell by 0.9% during the March 2023 year - the largest fall since 2009. This is one of the most disgusting economic statistics that I have seen in a long time, and it's disappointing.
Lower food prices not good for all
Why on earth does a moderation to food pricing pressures concern me? Well it is because a big part of the decline has been driven by a weakening of fortunes for key export commodities.
NZ back in recession
The official data is only confirming what we already knew. People and businesses have shut their wallets, everything is falling in per capita terms, and the only thing that has been keeping up the headline is sky high population growth.
Migration high, but moderating
Net migration figures released this morning showed that immigration remains high, but has moderated somewhat from its February/March peak. Today's result is likely to further reassure the Reserve Bank that short-term inflation is unlikely to be exacerbated by a sharper spiking from new migrants' demand.
Recession ahead of schedule
Three months ago I picked it that NZ was already in a recession - six months ahead of the RBNZ's expectation. It has now been confirmed that, with a slight 0.1% decline in March, New Zealand is in a technical recession at present.
Job market strength seals cash rate lift
Labour market data to March 2023 has highlighted ongoing strength in the job market and sharply higher wages - the data will reinforce the Reserve Bank of New Zealand's case for an increase to the official cash rate at its 24 May review.
NZ may already be in recession
GDP fell 0.6% in the December quarter. Although this is the first official quarter of decline, it almost certainly marks the start of a recession, with economic activity likely to fall further in the March quarter. I am less convinced it will be the shallow 'goldilocks' recession the RBNZ has projected
Credit agencies concerned with NZ’s ballooning deficit
New Zealand's current account deficit expanded to a record 8.9% of GDP in December and could risk a credit rating downgrade for New Zealand. Cool the jets with too much frivolous debt-fueled consumption.
Reserve Bank shouldn’t be too trigger happy despite high inflation
Inflation data to September caught many forecasters with their pants down. The consensus had been that inflation would […]