New Zealand Economic Outlook
July 21, 2020The downturn seemingly intensified in the second quarter, after the economy slumped in the first quarter at the sharpest pace in nearly 30 years due to containment measures suppressing domestic demand. Despite June’s remarkable recovery in retail card spending, April’s collapse in card transactions coupled with plunging consumer confidence in April-May spells trouble for private consumption in Q2. Moreover, notably downbeat business sentiment points to vanishing investment activity, while falling merchandise exports in April-May indicate frail external demand. Meanwhile, on 5 July the government announced it will extend until the end of the year an interest-free loan program for small businesses to sustain the recovery. In politics, opposition leader Todd Muller unexpectedly resigned in mid-July, amid polls showing Prime Minister Jacinda Ardern was likely to retain power in the September elections.
New Zealand Economic GrowthDespite the significant fiscal and monetary policy measures deployed to cushion the impact of the pandemic and the relatively fast lifting of lockdown measures, the economy is set to take a severe hit this year. A solid bounce back in H2 will crucially depend on the evolution of the health situation, which represents the main downside risk. FocusEconomics panelists project the economy to contract 5.3% in 2020, which is up 0.7 percentage points from last month’s estimate, and to grow 5.3% in 2021.
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|Bond Yield||1.67||1.20 %||Dec 30|
|Exchange Rate||0.67||-1.69 %||Jan 01|
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New Zealand Economic News
August 5, 2020
The seasonally-adjusted unemployment rate unexpectedly fell to 4.0% in Q2 from 4.2% in the previous quarter.
July 31, 2020
The ANZ-Roy Morgan consumer confidence indicator dipped to 104.3 in July from June’s 104.5, suggesting the rebound in confidence could be over.
July 19, 2020
The ANZ bank business outlook indicator recovered further ground in July as the country lifted lockdown, although sentiment remained downbeat.
July 16, 2020
Consumer prices fell at a four-and-a-half-year sharp rate of 0.48% in Q2 2020 over the previous quarter amid economic havoc wreaked by the Covid-19 pandemic, swinging from Q1’s 0.77% rise.
June 26, 2020
The ANZ-Roy Morgan consumer confidence indicator jumped to 104.5 in June from May’s 97.3, as lockdown measures were almost completely removed.