Australia & New Zealand Economics Focus Consumption by sector: winners and losers While we expect that overall consumption growth will slow further this year and remain subdued in 2018 as well, not all areas of spending are equally vulnerable. Past behaviour suggests that spending... 10th July 2017 · 1 min read
Australia & New Zealand Economics Focus Further slowdown in consumption growth ahead There is growing evidence that the household sector has begun to falter and, given the worryingly weak outlook for income growth, the situation is unlikely to turnaround any time soon. Indeed, we... 5th June 2017 · 1 min read
Australia & New Zealand Economics Focus Budget response: Where’s the boost to the economy? Despite all the headlines suggesting that the Treasurer has embarked on an infrastructure spending spree, the fiscal figures appear to show that the economy is not going to be significantly stronger... 9th May 2017 · 1 min read
Australia & New Zealand Economics Focus Australia and three big global uncertainties An easing in economic growth in China coupled with the downside risks to Australia posed by the potential policies of President Trump will mean that the Reserve Bank of Australia won’t follow the US... 12th March 2017 · 1 min read
Australia & New Zealand Economics Focus Recession or rapid recovery? We wouldn’t rule it out completely, but it is looking less likely that Australia fell into its first recession since 1991 at the end of last year. However, a sustained period of stronger growth is not... 7th February 2017 · 1 min read
Australia & New Zealand Economics Focus Balancing the budget will be more painful The ratings agencies have shown that they are full of Christmas cheer by maintaining Australia’s AAA credit rating even though the Mid-Year Economic and Fiscal Outlook revealed that the budget deficit... 19th December 2016 · 1 min read
Australia & New Zealand Economics Focus The persistent part-time problem The recent rise in the share of people working part-time but who would like to work longer will continue to restrain wage growth for another couple of years yet. This part-time problem means that a... 14th December 2016 · 1 min read
Australia & New Zealand Economics Focus The structural decline in investment The structural decline of the manufacturing sector means that the long-awaited transition from mining investment towards non-mining business investment may never happen to the extent that most people... 26th September 2016 · 1 min read
Australia & New Zealand Economics Focus Inflation targeting – time for a change? The Reserve Banks of Australia and New Zealand are likely to ignore suggestions that they should lower their inflation targets since that would drive inflation even lower. Targeting nominal GDP growth... 14th September 2016 · 1 min read
Australia & New Zealand Economics Focus A new era of very low inflation The unusually low rates of underlying inflation in both Australia and New Zealand will remain a thorn in the side of policymakers for a number of years yet. This explains why we believe that the... 30th June 2016 · 1 min read
Australia & New Zealand Economics Focus US-style collapse unlikely, but house prices will still fall A US-style collapse in house prices in Australia is unlikely when lending conditions during the good times have not been as loose as in America and Australian banks are better placed to cope with the... 23rd May 2016 · 1 min read
Australia & New Zealand Economics Focus Pre-election Budget postpones fiscal pain While the Budget has been badged as focusing on “jobs and growth”, Treasurer Scott Morrison was clearly thinking about his own job and the probable Federal election on 2nd July when he crafted it... 3rd May 2016 · 1 min read
Australia & New Zealand Economics Focus Outlook for Australian services exports good, not great While exports of services will continue to grow rapidly over the next decade, they won’t boost GDP by anywhere near as much as resources exports have. For that to happen, countries such as China and... 13th April 2016 · 1 min read
Australia & New Zealand Economics Focus MYEFO – Hiding a larger structural fiscal hole The decision by the Treasurer to use the Mid-Year Economic and Fiscal Outlook (MYEFO) to draw attention to the deterioration in the fiscal position triggered by the weak economic backdrop is one that... 15th December 2015 · 1 min read
Australia & New Zealand Economics Focus Judging the health of New Zealand’s economy Our new Capital Economics New Zealand Activity Proxy (CE NZAP) provides a timely guide to changes in economic activity in New Zealand well ahead of the official GDP data and is a useful barometer of... 20th August 2015 · 1 min read
Australia & New Zealand Economics Focus What would Grexit mean for Australia? The Australian economy would be largely untouched even if the current problems in Europe culminated in a widespread financial crisis and another euro-zone recession. That said, if the Reserve Bank of... 2nd July 2015 · 1 min read