Australia & New Zealand Economics Focus Is a financial crisis looming? The most likely consequence of the rapid build-up of household debt over the past decade is a number of years of softer GDP growth and lower interest rates than widely expected. But the risk of a more... 13th June 2018 · 1 min read
Australia & New Zealand Economics Focus Budget response: Asking too much of the economy While the good performance of the economy has allowed Treasurer Scott Morrison to cut income taxes and project a return to a budget surplus one year ahead of schedule in the last Budget before next... 8th May 2018 · 1 min read
Australia & New Zealand Economics Focus What next for house prices? The recent fall in the demand for housing relative to the supply is consistent with house prices continuing to decline in the coming months. While prices may only edge lower this year and next, higher... 10th April 2018 · 1 min read
Australia & New Zealand Economics Focus Life after the booms The economy will probably cope reasonably well even though both the mining and housing booms are over, but over the next couple of years it is unlikely to strengthen as much as policymakers hope. Over... 12th March 2018 · 1 min read
Australia & New Zealand Economics Focus Has the natural rate of unemployment fallen? The unemployment rate may need to fall from 5.5% currently to around 4.0% before wage growth rises significantly. This is partly due to the existing excess capacity not captured by the unemployment... 21st February 2018 · 1 min read
Australia & New Zealand Economics Focus Will population growth save the housing market? Australia’s rapid rate of population growth doesn’t mean that house prices will always rise as population is not the most important determinant of demand over short periods of time. In any case, it’s... 11th December 2017 · 1 min read
Australia & New Zealand Economics Focus When will interest rates rise? We believe the financial markets have gone too far by pricing in a strong possibility that the Reserve Bank of Australia will raise interest rates twice next year, from 1.5% to 2.0%. Economic... 12th October 2017 · 1 min read
Australia & New Zealand Economics Focus How overvalued is housing? Once you take into account the structural decline in interest rates over the past 40 years, housing in Australia isn’t as overvalued as some analysts have suggested. In fact, in most capital cities it... 20th September 2017 · 1 min read
Australia & New Zealand Economics Focus Has economic growth passed its peak in New Zealand? While GDP growth should hold up fairly well over the next year, we expect there will be a sharper slowdown than the RBNZ and most analysts are anticipating in 2019 as the impacts of a cooling housing... 12th September 2017 · 1 min read
Australia & New Zealand Economics Focus The new long-term inflation trend History may be turned on its head over the next decade with Australia and New Zealand experiencing lower inflation rates than some of their peers. It follows that their exchange rates may be weaker... 15th August 2017 · 1 min read
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
