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

Global diesel prices have surged significantly over the last few months. Driven largely by supply constraints, our Chart of the Month shows how this surge has led to a significant import cost premium over petrol. Elevated diesel prices will have ripple effects throughout both the global and local economies, and risk inflation remaining higher for longer. Read

Global economic trends have been in sharp focus recently, with attention shifting away from interest rate hikes and onto the global financial system temporarily. But the international economic picture will become increasingly important, as the globe faces some of the weakest economic conditions since the onset of COVID-19 – with a more prolonged hit possible. In this article, we briefly profile how global economic activity is expected to play out in 2023, and why. Read

International shipping costs have eased since September 2021. As shown in Chart 1, the Freightos Global Container Freight Index peaked in September 2021 at more than eight times the level it was at two years prior. The index has since declined rapidly, down 57% by September 2022. Read

The global economic outlook soured in early 2022, with the recovery being stifled by high inflation, continued supply chain disruptions, and rising geopolitical clashes. There’s a lot happening, and although this article doesn’t capture every piece of global economic news, it does set out some of the key global hurdles, and what they mean for the economic outlook. Read

New Zealand’s second-hand car market is highly dependent on imports from Japan. Japan is one of few large car-producing nations that also drives on the left-hand side of the road, making New Zealand a logical potential buyer of used cars. However, with economic headwinds in sight for the Japanese ec... Read

Fuel prices have shot up in recent weeks after tough sanctions were imposed on Russian oil and gas companies and their exports by a large suite of countries. The sanctions come in response to Russia’s invasion of Ukraine and are designed to effectively cut Russia off from the global economy and hurt... Read

Fuel prices were already high at the beginning of 2022 as supply chains and fuel production weren’t keeping up with the rebound in global demand. Resurgent economic activity due to easing COVID-19 restrictions worldwide has meant demand for fuel has recovered from its slump in 2020 and early 2021. On top of this, the war in Ukraine and the subsequent sanctions imposed on Russia have only exacerbated the upwards fuel price spiral. Read

The global security picture has been upended after the Russian invasion of Ukraine last week, with heavy fighting across all invasion fronts, substantial sanctions on Russia by Western countries, and Russian President Vladimir Putin ordering the country’s nuclear deterrence forces “to a special mode of combat duty.” Global tensions are ratcheting higher, with increased uncertainty about the global economic outlook. Prices for energy products, farm inputs, and metals have risen, and financial markets are volatile as the Russian financial system feels the pressures of isolation. Read

Last month we looked at how quickly international travel will return as New Zealand’s borders reopen. Evidence from people movements between other countries suggests an eagerness to travel again, especially if there are no restrictions. For example, flight numbers between the US and Mexico are now sitting above pre-pandemic levels. Read