Australia & New Zealand Economics Focus The impact of the pandemic on inflation We expect inflation to rise to the mid-point of the RBA’s target band over the next couple of years. The main driver is a continued tightening of the labour market and a pick-up in wage growth. By... 2nd June 2021 · 16 mins read
Australia & New Zealand Economics Focus Australia - Pandemic unlikely to result in long-term scarring The closure of the border will reduce Australia’s potential output by around 2.5%. But this will be partly offset by higher productivity growth due to increased usage of technology and more employees... 6th May 2021 · 17 mins read
Australia & New Zealand Economics Focus Pandemic-driven staff shortages could lift wage growth Even though the unemployment rate is still as high as it was during the mining bust, job vacancies and the share of firms reporting staff shortages have surged. We suspect that this has been driven by... 22nd February 2021 · 11 mins read
Australia & New Zealand Economics Focus RBNZ to hike rates next year We now expect the RBNZ to tighten monetary policy in the years ahead as GDP growth, the labour market and inflation will be much stronger than the Bank has anticipated. We expect asset purchases to be... 26th January 2021 · 18 mins read
Australia & New Zealand Economics Focus The impact of China’s trade restrictions on Australia We estimate that the exports of goods and services that are already facing restrictions by China contribute around 1.8% to Australia’s GDP. While we still expect iron ore and liquefied natural gas... 23rd December 2020 · 13 mins read
Australia & New Zealand Economics Focus House prices may rise by 7% in 2021 The improvement in the labour market, lower borrowing costs and a turnaround in leading indicators all suggest that the housing downturn will soon come to an end. We now expect house prices across the... 22nd September 2020 · 16 mins read
Global Economics Focus Lasting blow to supply capacity is not inevitable It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government... 29th June 2020 · 28 mins read
Australia & New Zealand Economics Focus Australia - How will policymakers rein in soaring public debt? Australia’s gross government debt/GDP ratio will hit the highest level since WWII by 2022/23. While the budget deficit will narrow again over the coming years as tax revenues rebound and stimulus... 1st June 2020 · 17 mins read
Australia & New Zealand Economics Focus Australia - Consumption growth to remain muted this year Rising housing wealth may encourage households to spend a larger share of their incomes. But we expect income growth to weaken again as jobs growth slows and rising unemployment keeps a lid on wage... 13th February 2020 · 12 mins read
Australia & New Zealand Economics Focus Productivity growth should pick up again soon The recent weakness in productivity is largely cyclical and reflects the slump in homebuilding. While Australia probably won’t be a frontrunner in the digital revolution, we expect labour productivity... 25th November 2019 · 13 mins read
Australia & New Zealand Economics Focus What will New Zealand’s policymakers do in a crisis? Our central scenario is that cutting interest rates to 0.5% will be enough to weather the economic slowdown in 2020. And if required, fiscal policy and macroprudential tools could be used to help... 5th November 2019 · 18 mins read
Australia & New Zealand Economics Focus RBA to launch QE as inflation weakens further Underlying inflation was moored well below the lower end of the RBA’s 2-3% target band even as the housing market was booming and the labour market was tightening. With the unemployment rate set to... 21st October 2019 · 17 mins read
Australia & New Zealand Economics Focus Current account won’t remain in surplus for long A lower cost of funding via foreign liabilities, a higher return on overseas assets and falling capital goods imports should all support Australia’s current account over the next couple of years... 20th August 2019 · 13 mins read
Australia & New Zealand Economics Focus Will the RBA use unconventional tools? Our central scenario is that cutting interest rates to 0.5% will be sufficient to restore growth and eventually return underlying inflation to the RBA’s target. If more stimulus were required, the... 17th July 2019 · 18 mins read
Australia & New Zealand Economics Focus House prices may rebound in early 2020 We expect the current housing downturn to end around the turn of the year. We think that house prices may rise by 3% from their trough in 2020 and by 5% in 2021. While rising house prices should boost... 29th May 2019 · 1 min read
Australia & New Zealand Economics Focus What does slower growth in China mean for Australia? China’s slower housing and infrastructure investment growth will weigh on demand for iron ore and metallurgical coal. Further increases in services exports are unlikely to offset that drag. The coming... 6th May 2019 · 1 min read