The government’s plans to fully deliver its promised tax cuts at next month’s budget must be in doubt, as the economy falters and the fiscal position continues to get squeezed. Compared to the government’s 2023 Budget, the deficit is tracking to be $1.8b larger than forecast. Read

Economic pressures are getting real for people this year, as higher mortgage rates continue to suck more money out of household budgets, and a swathe of recent job losses undermine income security. Infometrics’ latest economic forecasts show annual GDP and private consumption spending growth briefly... Read

The unprecedented migration surge since mid-2022 has seen a net 110,000 working-age people added to the population during the last 12 months. This outcome is a flow-on effect from the labour market disruption caused by the borders being shut during COVID-19. Businesses have needed to... Read

We economists can be a tactless bunch. Last week’s announcement that the economy had contracted for the fourth time in five quarters was greeted with comments about how the recession was necessary, and that the extent of the contraction only highlighted to serve how overheated... Read

The stock of homes available for purchase on realestate.co.nz increased in February to its highest level since 2015, as more people listed their properties for sale. In the last five years, monthly new listing numbers onto the market have only been higher than February’s total... Read

All eyes are on the Reserve Bank this week, with a few different guesses over what they’ll say and do. The variety of opinions reflects a lot of twists and turns in the last couple of months. Financial markets got excited about the possibility of... Read

There are currently a lot of moving parts to New Zealand’s economic outlook, as we consider prospects throughout 2024 and into 2025. The challenges to forecasting are nowhere near as pronounced as they were during the Covid-19 pandemic, when the expectations and outcomes were, literally, off the charts. Instead, there are conflicting pressures and signals making it difficult to know which influence will ultimately prevail – conditions that are typical when the economy is at a turning point. Read

In New Zealand’s laissez-faire economy, there are two main institutions with the ability to have a significant effect on economic outcomes. One of those institutions, the Reserve Bank, attracts plenty of attention and generates its fair share of column-inches with its monetary policy decisions. But it’s debatable ... Read

New Zealand’s economic prospects are brightening, according to Infometrics’ latest forecasts. GDP growth is predicted to average 2.0%pa during 2024 and 2025, which represents a substantial upward revision from the 1.2%pa growth that was being forecast by Infometrics in October last year. This more positive outlook is underpinned by continued high net migration that is set to take longer to retreat from its current record level. Improving business confidence will also lead to more positive outcomes for business investment spending. Read

On Tuesday, Reserve Bank Chief Economist Paul Conway will deliver a speech on how the global economy has changed since the Covid pandemic, and the role of more frequent and accurate data to inform monetary policy decisions. Unusually, though, the speech will include “brief comments on domestic data developments” since the Bank’s last Monetary Policy Statement in November. Read