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Recent releases

Lower dairy and log exports weaken the trade balance The annual trade surplus narrowed sharply in September as exports plunged while imports soared during the month. Although some of the pick up in imports was due to large one-offs, exporters’ woes are expected to persist over the coming months. Read more

Muted price growth in September The consumers price index rose 0.3% in the September quarter to sit just 1.0% higher than a year earlier. Although we had expected inflation to be subdued, this result flew below most market expectations for price growth. Weak price inflation was broadly spread across categories, with prices excluding outliers up only 1.3% from September 2013. Read more

Commentary

Where’s the inflation? The New Zealand economy has grown by 3.8% over the last year. That rate is at least a full percentage point faster than estimates of New Zealand’s potential growth rate. And by the Reserve Bank’s assessment, our economy is currently producing about 0.5 percent ahead of what we could sustain over the medium term without generating inflation.
Industry effects of minimum wage increases In 2012, the Living Wage Aotearoa NewZealand movement[1] commissioned a report on a livingwage.  As this movement gathered momentum, there has been a social push forminimum wages hikes – something a number of government parties brought intotheir pre-election policies.  This article will look into the industries mostaffected by minimum wage increases and analyse likely business responses overthe short and medium term. Read more.

What has happened with household debt? New Zealand households owe a lot of money,but they also own a lot in terms of assets.  In this article we briefly outlinewhy debt has increased, and why we believe households will still be willing andable to borrow over the next few years. Read more.

Latest Forecasts

Best before: February 2014

If you’ve gone to the fridge and taken a swig of milk from the bottle lately, you will have noticed it’s got lumps in it – which is hardly surprising when you look at the “best before” date. Prospects for the dairy payout and GDP growth looked pretty tasty back in February, but things have soured markedly throughout the course of this year.