Australia & New Zealand Economics Update New Zealand - Capital requirement concerns are overblown Commercial banks in New Zealand have kicked up a fuss over a proposal by the Reserve Bank to increase the level of capital the banks are required to hold. By contrast, we believe the new rules won’t... 25th July 2019 · 4 mins read
Australia & New Zealand Economics Update Benefits from lower company tax rate would be small Australia’s corporate tax rate remains one of the highest in the world. However, the boost to GDP growth from lowering it towards the levels seen elsewhere would probably be quite small. 24th July 2019 · 4 mins read
Australia & New Zealand Economics Update State infrastructure spending won’t come to the rescue The federal government has urged state governments to step up infrastructure spending. But given the deterioration in their finances, we suspect that states are more likely to reduce capital spending. 22nd July 2019 · 2 mins read
Australia & New Zealand Economics Update RBA will probably cut rates to 0.5% While the RBA lowered the cash rate to 1.0% at today’s meeting, it signalled that it won’t ease policy any further for now. However, we think that the Bank remains too optimistic about the outlook for... 2nd July 2019 · 3 mins read
Australia & New Zealand Economics Update New Zealand - RBNZ will probably cut rates to 1.0% The RBNZ’s dovish tone supports our view that the Bank will cut rates again before the year is out. In fact, we now think the Bank will cut at its next meeting in August, and once more at its November... 26th June 2019 · 3 mins read
Australia & New Zealand Economics Update Banks still likely to pass on rate cut in full Some of Australia’s banks have lowered mortgage rates by less than the reduction in the RBA’s cash rate. That’s hard to justify in light of the recent fall in funding costs. We think that mortgage... 5th June 2019 · 1 min read
Australia & New Zealand Economics Update RBA may have to cut rates to 0.75% We think that today’s 25bp rate cut may be followed by two additional rate cuts before the year is out. Combined with renewed falls in iron ore prices, that suggests that the Australian dollar may... 4th June 2019 · 1 min read
Australia & New Zealand Economics Update New Zealand - Higher spending may provide a small economic boost Significant increases in operating and capital spending are a welcome takeaway from today’s Budget. But the economic impact is likely to be modest and the government is still expected to be a drag on... 30th May 2019 · 1 min read
Australia & New Zealand Economics Update RBA won’t launch QE anytime soon The RBA has made it clear that quantitative easing is its preferred tool once interest rates reach the effective lower bound. But we suspect that the Bank would first cut interest rates from their... 21st May 2019 · 1 min read
Australia & New Zealand Economics Update What does the Coalition victory mean for Australia? The Coalition government’s surprise victory in the federal election won’t make much of a difference for fiscal policy in the near-term but will result in smaller surpluses beyond 2022. It also... 20th May 2019 · 1 min read
Australia & New Zealand Economics Update RBA set to be disappointed by the economy The Reserve Bank of Australia’s (RBA) Statement on Monetary Policy (SMP) sounded a little more upbeat than the statement issued after the Bank kept rates on hold on Tuesday. We still think that the... 10th May 2019 · 1 min read
Australia & New Zealand Economics Update Strong credit growth no reason to cheer Strong business credit growth could be a sign that firms are becoming more upbeat about the outlook for business investment. In reality though, the data tend to lag actual investment spending and we... 9th May 2019 · 1 min read
Australia & New Zealand Economics Update New Zealand - RBNZ will cut again before the year is out Subdued economic growth and a softening labour market mean that today’s interest rate cut by the Reserve Bank of New Zealand will be repeated before the year is out. 8th May 2019 · 1 min read
Australia & New Zealand Economics Update RBA still likely to cut before long The Reserve Bank of Australia made only the slightest downward revisions to its forecasts when it left interest rates unchanged at 1.50% today. But it noted that further improvements in the labour... 7th May 2019 · 1 min read
Australia & New Zealand Economics Update What does a Labor victory mean for Australia? Labor has pledged sizeable tax hikes that probably won’t be offset by higher expenditure, which means that fiscal policy will almost certainly be tighter under a Labor government than under the... 29th April 2019 · 1 min read
Australia & New Zealand Economics Update New Zealand - Is growth bottoming out in New Zealand? Our New Zealand Activity Proxy (NZAP) has picked up in early 2019, which suggests GDP growth may be bottoming out. That said, economic activity is likely to remain subdued over 2019 as business... 23rd April 2019 · 1 min read
