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Still a large gap in New Zealand output

  • The New Zealand economy shrank at the end of last year as the construction sector struggled to find the resources to continue to expand, while retail trade and accommodation activity dropped due to a lack of tourists.
  • New Zealand is in a better position than many other economies, but there is still a gap between our potential output and where we are currently tracking, which is acting as a disinflationary force.
  • It seems unlikely that the RBNZ will hike rate hikes in the next year; they have many other actions they could take before contemplating interest rate hikes.
  • Longer-dated bond yields could be led higher by offshore developments as global growth beats expectations.
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Hamish Pepper web
Hamish Pepper | Posted on Mar 19, 2021
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Harbour Macro Research Day: Light at the end of the tunnel

  • Harbour’s internal Macro Research Day is a chance to hear from external research providers, challenge assumptions and anchor our medium-term view.
  • Highly effective COVID-19 vaccines and early rollout are allowing investors to look past the current acceleration in northern hemisphere cases.
  • The New Zealand tourism industry is likely to miss international visitors over summer, however the rest of the economy is doing exceptionally well. Perhaps too well in the case of housing where Reserve Bank of New Zealand Loan-to-Value Ratio restrictions are coming to curb high-risk lending.
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Hamish Pepper web
Hamish Pepper | Posted on Dec 23, 2020
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A bold bounce

Key Points

  • Many economies, including New Zealand, are re-opening and recovering faster than expected
  • High growth rates are normal after such a large contraction in activity and the recovery, so far, is partial
  • Ongoing policy stimulus is expected, given the residual uncertainty
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Hamish Pepper web
Hamish Pepper | Posted on Jun 11, 2020