Australia & New Zealand
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Australia CoreLogic House Prices (Jul.)

House prices are continuing to surge and forward indicators suggest the upswing has a little further to run. Even so we think house price growth will slow in 2022.
Ben Udy Australia and New Zealand Economist
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Australia & New Zealand Economics Weekly

RBNZ set to tighten in October, RBA in early-2023

The strong rise in New Zealand’s GDP in Q2 nearly returned output to its pre-virus path despite the headwinds from low net migration and the slump in foreign tourism. So while GDP plunged in Q3, we still think the RBNZ will be comfortable raising rates in October. Meanwhile, the lockdowns in Australia will probably cause the unemployment rate to rise in the months ahead. But we doubt the rate will surge as high as the RBA expects. Our bullish view on the labour market underpins our non-consensus forecast that the RBA will lift rates in early 2023.

17 September 2021

Australia & New Zealand Data Response

Australia Labour Market (Aug.)

Employment plunged by 1.1% m/m in August, but we still think that the unemployment rate won’t surpass it pre-Delta level over the coming months even as the participation rate rebounds.

16 September 2021

Australia & New Zealand Data Response

New Zealand GDP (Q2 2021)

The strength in activity in Q2 was partly driven by the travel bubble which burst in Q3 as New Zealand went into lockdown. While we expect domestic demand to recover toward the end of the year, services trade may not rebound as quickly.

16 September 2021

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Australia & New Zealand Chart Book

Vaccination threshold may be hit in four months

With new virus cases hitting fresh highs this week, Sydney’s lockdown has been extended until end-August and looks set to last for months given the high transmissibility of the Delta variant. Melbourne also briefly re-entered lockdown this month, though restrictions have now been lifted. Other states may manage to keep Delta at bay, but with NSW accounting for one-third of nationwide output, we’re forecasting a 1% q/q decline in Q3 GDP. However, we expect growth to rebound in Q4. The government has now announced that the domestic economy will fully reopen when 70% of the eligible population are fully vaccinated. We estimate that may happen in about four months if daily vaccinations reach 0.8% of the population by the end of this quarter and stay there until year-end, from 0.6% over the past week.

30 July 2021

Australia & New Zealand Economics Weekly

RBNZ to tighten policy as inflation surges

The RBNZ announced an end to its asset purchases at this week’s meeting. And given the Bank’s hawkish tone, along with the strong inflation data in Q2, we now think the Bank will begin lifting interest rates in August. The strength in New Zealand’s inflation adds to the near-term upside risk to our forecasts for goods inflation in Australia. But even if goods inflation eases further as we expect, the tightening labour market will still put pressure on wage growth and services inflation before long which is why we expect the RBA to hike interest rates earlier than it currently anticipates.

16 July 2021

Australia & New Zealand Data Response

New Zealand Consumer Prices (Q2)

We had already expected the RBNZ to hike rates in August and the surge in inflation in Q2 only bolsters our confidence in that forecast.

16 July 2021
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