Australia & New Zealand
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Australia GDP (Q3 2021)

With private consumption now rebounding strongly as lockdowns have ended, output in states not affected by lockdowns continuing to rise, and capital spending resilient, we expect GDP to surpass its pre-Delta peak this quarter already and to keep surprising to the upside next year.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Australia & New Zealand Economics Weekly

Australia’s consumer exuberance won’t last

The strong rebound in consumer spending in November is consistent with our view that GDP surpassed its pre-lockdown peak in Q4 already. And while the Omicron tsunami seems to have resulted in a renewed slowdown in consumption, mounting staff shortages and disruptions to goods supply will result in continued strong increases in consumer prices. The upshot is that we still expect the RBA to end its bond purchases in three weeks, though the sluggishness in wage growth means we don’t expect the first rate hike until early next year.

14 January 2022

Australia & New Zealand Economics Focus

Housing downturn will lead to RBNZ rate cuts in 2023

While the strength in New Zealand’s economy will cause the RBNZ to hike rates further this year, we think the RBNZ will end its hiking cycle earlier than the financial markets anticipate. What’s more, we think a housing downturn in 2022 will weigh on the economy at the same time as inflation is easing and the labour market is loosening. On that basis we expect the RBNZ to cut rates in 2023. Drop-In: Neil Shearing will host an online panel of our senior economists to answer your questions and update on macro and markets this Thursday, 13th January (11:00 ET/16:00 GMT). Register for the latest on everything from Omicron to the Fed to our key calls for 2022. Registration here.

12 January 2022

Australia & New Zealand Data Response

Australia - Retail Sales/External Trade (Nov. 2021)

November’s data support our view that GDP will surpass its pre-delta level in Q4. But while the strength in retail sales is set to fade in the months ahead as Omicron weighs on consumption, the likely drag from net trade to GDP growth in Q4 is also likely to reverse in Q1.

11 January 2022

More from Marcel Thieliant

RBA Watch

Market pricing on RBA still too optimistic

The rapid rebound in activity from the recent lockdowns coupled with a further pick-up in underlying inflation should prompt the Reserve Bank of Australia to taper its bond purchases in February and to end them in August. However, we believe that the financial markets are too optimistic about both the timing and the scale of rate hikes.

30 November 2021

Japan Data Response

Japan Retail Sales (Oct. 2021)

Retail sales kept rising in October despite another drop in motor vehicles sales. With supply disruptions now starting to ease and mobility picking up, they should continue to increase.

29 November 2021

Australia & New Zealand Economics Weekly

Border reopening won’t ease labour shortages much

Australia’s government isn’t keen on opening the immigration floodgates once the border reopens to migrants next year and we still expect the unemployment rate to fall to 4% by 2023. Nor do we expect migration to ease labour shortages in New Zealand much next year. Nonetheless, New Zealand’s labour market is already very tight and with the RBNZ set to keep tightening monetary policy, we expect unemployment to creep higher over the next couple of years.

26 November 2021
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