Kiwi’s Feeling Recessionary, While The Central Bank Turns A Bit Dovish!
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- Опубліковано 9 лип 2024
- If you talk to ordinary Kiwi’s across New Zealand, its pretty clear things are not looking good. We already highlighted the easing of home prices and businesses are closing in many centres, take for example, downtown Wellington, New Zealand’s capital city, where dozens of empty shops speak to an economic gloom that’s pervading the entire country.
Retailers are in the front line as households simply do not have money to spend, given the current 5.5% interest rate, and until now expectations that rates will remain here for the rest of the year. Struggling retailers are the most visible sign of a sag in demand that’s hitting multiple industries, from manufacturing to construction and real estate.
Possibly the latest Reserve Bank released “OCR 5.50% - Inflation Approaching Target Range” gives a slight hint of possibly earlier relief, but barring the pandemic-induced slump in 2020, the economy is heading for its worst year since the Global Financial Crisis 15 years ago.
The RBNZ on Wednesday acknowledged that domestic price pressures still remain strong, but said there are signs “inflation persistence will ease in line with the fall in capacity pressures and business pricing intentions.”
So, it does appear the RBNZ’s next move will be a cut, though there is a wide range of views on the timing - from as soon as August this year to as late as the first quarter of next year. They will be reliant on incoming data, and we know from previous history data can turn negative quite quickly, once we factor in the current higher Oil prices, and shipping costs alongside weaker new migration as more Kiwi’s head offshore.
In the longer term, it could be the higher Kiwi rate will pull them through the inflation battle quicker than in Australia where rates are a lower 4.35%, and where there is still talk of a need to raise rates to pull inflation down. At least in New Zealand, inflation is easing, for now; but the social and economic consequences of the brutal Monetary Policy will be with us for years.
Worth remembering that this bout of inflation was inflicted by too loose monetary policy, QE and high Government spending and debt. As always policy makers case the problem but real people play the price!
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NZ is the pits. I got out a while ago. Whilst Aussie has its problems, it’s far more robust than NZ. The biggest problem is peoples apathetic attitudes. This is the fundamental reason for its lack of productivity. The politics is horrible and everyone loved to rely on the government to fix their problems.
Spot on.
I need to go to Aussie to get some injuries fixed up but the snakes and pepper spraying of teenagers make me reluctant to move in a hurry
hit the nail on the head , 3 tax breaks to land lords in as many months is crazy
Australia will have to raise the cash rate, inflation is killing all
Great presentation thank you
No one (smart) pays full retail anymore as the shops have sales every other week. Some retailers have worked out that we are using this waiting tactic and are cycling sales on certain categories of items which is quite clever. This is how they get people to do impulse buys on things they might need later.
It’s a bit strange, somehow UA-cam has unsubscribed me from your channel so I had to subscribe once again… anyway thank you for your videos!!!
Weird, thanks for subscribing again...
Pist, don't forget to give a like please.❤
Nz has been ruined
It doesn't help that that the health care system has gone further to pack on many levels
@@louisejoel the health care system is atrocious for a so called first world country. I was a Dr in Christchurch for many years. The level of mismanagement in public hospitals is astounding. The sense of entitlement from the NZ public doesn’t help either. I’m so glad to be back in Oz.
@@krissolimmo I have limited use of my dominant hand because a phlebotomist hit my median nerve after whipping the tourniquet very tight. It has recently worsened and this happened a year and a half ago. The tingling has become more intense and I can't do repetitive tasks any longer. Aside from that a related fall on both knees has left me with cartilage fissures and I couldn't get any help with that either except for a kind immunologist in Auckland ordering a scan of one of the knees.
@@louisejoeland I bet ACC is doing everything in its power to not cover the injury with all its corrupt staff.
@@krissolimmo ACC have been ok. It's the local GPs who have misreported all of my injuries in my town so I have documented the more recent ones with a ton of photos and videos. The local doctors and physios know they will be covered for their consult fee for a sprain or contusion so that's why they misreport everything but all of my injuries are bone, cartilage and nerve injuries. One of the part time gigging locum doctors reported my treatment injury as happening from sport in prison for a laugh and the physio made it worse to the point my hand was numb after each session. The physios here don't even bother taking notes after the initial consult.