Australia & New Zealand Economics Update Budget not as expansionary as it looks The Coalition government’s Budget for 2019/20 promises additional tax cuts while still achieving a budget surplus. Labor will probably win next month’s federal election and we suspect it will at least... 2nd April 2019 · 1 min read
Australia & New Zealand Economics Update RBA will soon have to cut rates The Reserve Bank of Australia sounded more cautious when it left interest rates unchanged at 1.50% today. With the full impact of the housing downturn on economic activity yet to be felt, we think the... 2nd April 2019 · 1 min read
Australia & New Zealand Economics Update New Zealand - RBNZ will cut rates this year The RBNZ took a surprising dovish turn when it left the official cash rate on hold at 1.75% today, indicating that the next move is likely down. Given that we are more downbeat about the outlook for... 27th March 2019 · 1 min read
Australia & New Zealand Economics Update Housing downturn becoming a major drag We believe that the downturn in the housing market will have a larger negative impact on the economy than most believe and have lowered our GDP forecast for 2019 to 1.5%. The upshot is that the labour... 20th March 2019 · 1 min read
Australia & New Zealand Economics Update New government can’t ignore the weaker economy Irrespective of the incoming government’s planned policy, the deterioration in the economic outlook means that fiscal policy should become stimulatory to avoid exacerbating the downturn. 14th March 2019 · 1 min read
Australia & New Zealand Economics Update RBA’s optimism won’t last long The RBA remained fairly confident when it left rates on hold today at 1.50% but we expect that as the data deteriorate this year the Bank will take a more dovish view. And before the end of the year... 5th March 2019 · 1 min read
Australia & New Zealand Economics Update The housing downturn isn’t over yet The rise in auction clearing rates in early February is probably just temporary. Housing remains overvalued and other leading indicators point to a continued decline in house prices. We therefore... 21st February 2019 · 1 min read
Australia & New Zealand Economics Update New Zealand - RBNZ gets more realistic by taking a neutral stance We think the explicit neutral stance adopted by the RBNZ in today’s policy meeting is appropriate as we suspect that the economy will not gain enough momentum to support interest rate hikes until 2021... 13th February 2019 · 1 min read
Australia & New Zealand Economics Update Weak business sentiment another drag on investment The relatively small bounce-back in business conditions in January suggests that the collapse in December was more than a blip. The recent deterioration in sentiment is likely to mean that business... 12th February 2019 · 1 min read
Australia & New Zealand Economics Update RBA will cut rates in 2019 as reality bites Although the RBA took a more dovish tone when it left rates on hold today we think it will need to consider cutting rates before long as the economic outlook deteriorates. While the RBA still sees... 5th February 2019 · 1 min read
Australia & New Zealand Economics Update Royal Commission will add to slowing credit growth The final report by the Royal Commission may add to the changes in bank behaviour that are already underway. However, the report did not recommend much that is likely to cause an upheaval for the... 4th February 2019 · 1 min read
Australia & New Zealand Economics Update What does slower growth in China mean for Australia? Slower growth in China won’t immediately restrain Australia’s exports. But by lowering commodity prices, it makes investment in new mining projects less profitable and means that the mining investment... 31st January 2019 · 1 min read
Australia & New Zealand Economics Update Support for first-time home buyers may come too late A renewed increase in public support for first-time home buyers would probably result in a rebound in home sales and house prices. But with federal elections due by May, any step-up in government... 28th January 2019 · 1 min read
Australia & New Zealand Economics Update New Zealand - Activity proxy still points to a softening in growth Our New Zealand Activity Proxy (NZAP) suggests economic activity remains soft and that the slowing in GDP growth has further to run. That supports our view that GDP growth will weaken from 2.8% in... 23rd January 2019 · 1 min read
Australia & New Zealand Economics Update Spending boost from lower petrol prices won’t last The recent declines in petrol prices may boost consumer spending by around 0.6 percentage points in the first half of 2019. But we suspect that this impact won’t be enough to prevent consumption... 9th January 2019 · 1 min read
Australia & New Zealand Economics Update Our key calls for 2019 GDP growth will probably weaken in both Australia and New Zealand in 2019. And even though the labour market may tighten a little further, inflation is unlikely to rise much. The upshot is that... 3rd January 2019 · 1 min read
