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

The New Zealand economy has entered the new year with questions about whether the worst of the post-Covid hangover is behind us, or whether there’s more of a slowdown to come in 2024. We have collected our thoughts on three issues that will play a key role in determining New Zealand’s economic performance this year. Read

Chief Forecaster Gareth Kiernan has penned Infometrics’ traditional Christmas Carol. Sung to the tune of Tommie Connor's Christmas song “I Saw Mommy Kissing Santa Claus”. Read

The final vote counts and seat allocations from the election will be released this Friday, confirming whether NZ First is part of the next government and, if so, how much power they have. Although formal coalition talks have yet to begin, more informal conversations between the parties are ongoing, and National will already be compiling the key policies to feed into its expected mini-Budget in December. Given the issues that were dominating voters’ thinking in the lead-up to the election, what might be at the top of the new government’s to-do list? Read

A lot of business questions in the election lead-up focus on the possible pause in economic activity due to uncertainty before the polls. The common logic is that firms will wait to see how their operating environment might change post-election before committing to big investment or other spending decisions. A lot of central government work also grinds to a halt because there’s no point starting a project that will be consigned to the scrapheap in three months’ time. But now that we’ve all been out and voted – with a by-election to go in Port Waikato – we can all get on with things again, right? Read

The economy has been a key focus for the 2023 Election, dominated by the cost of living after inflation spiked to its strongest reading in three decades during the last electoral cycle. But at the same time, New Zealand’s unemployment rate of below 4% has seen record labour force participation and e... Read

Last week’s Pre-Election Economic and Fiscal Update presented politicians with the paradox that there is $4.8b of “spare” money available for new operating spending at next year’s Budget, but with warnings that this envelope is likely to be used up by business-as-usual operations. The apparent lack of headroom in the government accounts for either tax cuts or new spending initiatives has only increased the pressure on political parties trying to make their fiscal plans add up ahead of next month’s election. Read

Buried within the PREFU came a stark warning: although there’s money set aside to cover the critical cost pressures of government, that’s about it – so any future decisions around additional spending will need to be made in the context of raising more revenue or spending cuts elsewhere. That means there’s enough to keep the lights on, but maybe not enough to buy a new lamp. Read

A high and more persistent inflationary environment continues to cause challenges across the economy, although a moderation in the pace of cost increases has thankfully begun. It’s still challenging to celebrate current pricing trends – they’re not as frantic as previously, but equally they’re not back to normal either. Read

The full fuel excise duty returned on 1 July 2023, which provisionally added 28.5c/L to the domestic price of regular petrol. However, the price of regular petrol was still 53c/L lower than this time last year, as the substantial decline in fuel prices since July 2022 means prices are sharply down even though the fuel tax is no longer discounted. Read