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Australia - Vaccine rollout has yet to alter health situation

With Sydney tightening its lockdown and the one in Victoria set to be extended, we now expect GDP to shrink by 0.5% q/q in Q3. The vaccine rollout isn’t advanced enough yet to ease the medical situation meaningfully, but it is set to keep accelerating and render lockdowns obsolete by the end of the year.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Australia & New Zealand Economics Update

New Zealand - Budget boost will exacerbate inflationary pressures

While the government’s Budget was focused on equipping households to withstand surging living costs, by adding to demand we think it will cause inflation to be higher over the next year. That’s all the more reason for the RBNZ to continue hiking rates aggressively throughout this year.

20 May 2022

Australia & New Zealand Economics Weekly

Wage growth still set to approach 3% by year-end

While wage growth is set to reach 3% by the end of the year, this week’s labour market data didn’t contain any upside surprises that would convince the Reserve Bank of Australia to accelerate its hiking cycle at the upcoming meeting in June. Meanwhile, the opposition Labor party looks on track to win the federal election on Saturday. While Labor has only pledged slightly looser fiscal policy that would easily be offset by likely upward revisions to tax revenue, the party’s historical track record suggests that the budget deficit would shrink less rapidly than under the Coalition government over the coming years.

20 May 2022

RBNZ Watch

RBNZ to keep tightening aggressively

The New Zealand economy was running hot even when the Omicron variant was disrupting activity. Now that the peak of the Omicron wave has passed, mobility is rebounding and inflation expectations are rising even further. On that basis, we think the RBNZ will hike rates by another 50 bp at its meeting on 25th May 2022. And we still expect the RBNZ to hike rates at every meeting this year.

19 May 2022

More from Marcel Thieliant

Japan Economics Update

Bank shifting focus away from emergency response

The Bank of Japan today unveiled the details of its green lending facility, underlining that its focus is now moving away from addressing the pandemic towards longer-term structural issues.

16 July 2021

Australia & New Zealand Economic Outlook

Central banks to tighten as bust turns to boom

Sydney’s lockdown will keep a lid on Australia’s recovery for now, but booming housing markets should support consumer spending and dwellings investment in both countries. We don’t expect labour shortages to ease much when the border opens, so wages growth may finally accelerate. That should prompt the RBNZ to start hiking rates next month and the RBA to follow in 2023.

15 July 2021

Australia & New Zealand Data Response

Australia Labour Market (Jun.)

The labour market continued to tighten in June and while the lockdown in New South Wales may result in some bumps over the next couple of months, we expect wage growth to accelerate soon.

15 July 2021
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