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Infometrics April newsletter
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April 2022
NEWSLETTER

April presented some new challenges to the global economic outlook, with the Russo-Ukraine war continuing, inflation roared higher, and supply chains were knocked again. Principal Economist Brad Olsen reviewed these global factors and what they mean for the world economy and New Zealand.

The month was broken up by back-to-back long weekends, which gave Brad enough time and inspiration to examine New Zealand’s shop trading rules, where across New Zealand allows Easter Sunday trading, and why our shop trading hours are such a patchwork tapestry of non-sensical rules.

Senior Economist Nick Brunsdon looks at life expectancy for Māori, and the NZ Superannuation age, after the Māori Party called for a lower NZ Super age for Māori. Nick highlights the disparities in life outcomes, some possible bridging support that could be considered, but also highlights the need to address the underlying issues of lower life expectancy.

Just before Easter, Chief Forecaster Gareth Kiernan published our latest economic forecasts along with the rest of the forecasting team, noting that the economy is stressed as we pay the inflated price for too much stimulus. Thankfully, the day before the Reserve Bank heeded our advice and lifted the OCR by 50 basis points, ahead of inflation hitting 6.9%pa (published last week) – the fastest inflation in a generation.

Finally, as usual, we round out the April newsletter with a Chart of the Month from newly appointed Economist Joel Glynn, showing just how downbeat New Zealand households have turned about future economic expectations.

Global challenges stress world economic outlook
Masked-World
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.
Two-thirds of New Zealand areas have local Easter trading policies
Easter-Hot-Cross-Buns
In 2016, Parliament gave local councils the ability to set local policies to allow for Easter trading if a shop chose to. Although two-thirds of all councils now have Easter trading policies in place, most of the spending, and people, in New Zealand remain under restricted trading options. In short, shop trading hours are a patchwork tapestry of non-sensical rules. It’s time to reconsider our entire shop hours trading regime and reduce the regulatory burden on businesses and households.
Should we lower the superannuation eligibility age for Māori?
Photo: New Zealand Railways Corporation. https://www.flickr.com/photos/archivesnz/34779557894
Māori Party co-leader Rawiri Waititi recently called for the eligibility age for New Zealand Superannuation (NZ Super) to be lowered to 57 years of age for Māori. Waititi made the argument based on Māori having a lower life expectancy than non-Māori. Life expectancy only tells part of the story, so in this article we explore the issue by looking at life expectancy, health expectancy, and the nature of work.
Media Release: NZ economy stressed as we pay the inflated price for too much stimulus
Media release - April 2022 Forecasts
The latest forecasts published by Infometrics show that the New Zealand economy has become stretched to breaking point, with demand pumped to unsustainable levels by monetary and fiscal stimulus over the last two years. This support for the economy was implemented in the expectation of a major recession caused by COVID-19. But with supply constraints and disruptions a more persistent outcome from the pandemic, the consequences of excess demand are now becoming all too evident.
Chart of the Month: Consumer confidence woes
COTM_Apr22_Resized.jpg
Consumer confidence plummeted to an all-time low in March 2022 in response to the ongoing uncertainty of New Zealand’s economic outlook. Households are being squeezed by rising living and credit costs, and these costs are expected to continue increasing for the foreseeable future.
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