New Zealand Economic Outlook
October 20, 2020Incumbent Prime Minister Jacinda Ardern’s left-leaning Labour Party secured a landslide victory following the national elections held on 17 October, giving her the ability to either govern alone or form a coalition with the Green Party. The vote came against the backdrop of a seemingly patchy economic recovery in Q3, after GDP contracted at an unprecedented pace in Q2. Consumer confidence eased throughout Q3 from June’s post-lockdown high, but averaged much higher nonetheless relative to Q2. Meanwhile, electronic card transactions expanded on average in Q3 compared to Q2, although they were fairly volatile month-on-month. On the production side, a healthy increase in exports in July-August, coupled with improving business confidence at the tail-end of the quarter, pointed to stronger business activity. A further jump in business confidence in early October bodes well for momentum in Q4.
New Zealand Economic GrowthThe economy should recover robustly next year, as the reopening of the global economy supports external demand and the domestic economy resurges on the back of rebounding household spending and investment activity. Accommodative fiscal and monetary policy stances should also help the recovery. That said, further waves of the virus and global trade disputes pose risks ahead. FocusEconomics panelists project the economy to grow 4.5% in 2021, which is down 0.5 percentage points from last month’s estimate, and 3.0% in 2022.
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New Zealand Facts
|Bond Yield||1.67||1.20 %||Dec 30|
|Exchange Rate||0.67||-1.69 %||Jan 01|
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New Zealand Economic News
October 23, 2020
Consumer prices rebounded and increased 0.67% in Q3 2020 over the previous quarter as the economy bounced on easing restrictions.
October 8, 2020
The ANZ bank business outlook indicator improved considerably in October, according to a preliminary reading.
October 2, 2020
The ANZ-Roy Morgan consumer confidence indicator dipped to 100.0 in September from August’s 100.2, suggesting increased wariness amid a resurgence of coronavirus cases.
September 23, 2020
At its meeting on 23 September, the Reserve Bank of New Zealand (RBNZ) decided to leave the official cash rate (OCR) unchanged at its historic-low level of 0.25%, in line with market expectations.
September 17, 2020
The economy nosedived 12.2% in seasonally-adjusted quarter-on-quarter terms in the second quarter of 2020, following the first quarter’s 1.4% decrease.