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RBA recapitalisation would lift public debt

Rising interest rates will result in the RBA making further losses in the years ahead. The Bank’s existing reserves should be enough to absorb those losses in a benign scenario, but the Bank will stop paying a dividend. And in a worst-case scenario, the Treasury may inject capital of as much as 5% of GDP.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Australia & New Zealand Economics Update

What does a Labor government mean for Australia?

A Labor government will probably keep fiscal policy looser than the previous Coalition government, putting more pressure on the RBA to hike interest rates. But while a Labor government will make greater efforts to decarbonise the economy, the bulk of mining output is exported so this won’t have a big impact on the mining industry. And we doubt Labor will be able to end the trade war with China.

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Australia & New Zealand Economics Update

New Zealand - Budget boost will exacerbate inflationary pressures

While the government’s Budget was focused on equipping households to withstand surging living costs, by adding to demand we think it will cause inflation to be higher over the next year. That’s all the more reason for the RBNZ to continue hiking rates aggressively throughout this year.

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Wage growth still set to approach 3% by year-end

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20 May 2022

More from Marcel Thieliant

Japan Data Response

Japan Economy Watchers Survey (Oct. 2021)

The surge in October’s Economy Watchers Survey is the strongest sign yet that the economy is rebounding rapidly now that the bulk of the population is fully vaccinated and new virus cases have plunged.

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Japan Labour Cash Earnings (Sep. 2021)

Wage growth weakened in September as the Delta wave resulted in a drop in overtime working hours. But with the economy now rebounding and the labour market tightening, we still expect wage growth to climb above 1% next year.

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Japan Economics Update

Virus caution by the elderly not a big downside risk

Continued caution by the elderly is a downside risk to our upbeat forecasts for private consumption, but we’re already assuming that households won’t return to their old ways anytime soon.

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