Dennis Wesselbaum: How real-time data can lead to better decisions on everything....

How real-time data can lead to better decisions on everything from NZ’s interest rates to business investment

It is late July, and New Zealand is slowly receiving economic data from the June quarter. Inflation has hit a 12-month high, for example, confirming what many already suspected. But the country is still nearly two months away from getting figures on economic activity – namely, gross domestic product (GDP).

Professor Robert MacCulloch: The IMF ranks NZ as 183rd out of 196 nations in the world for 2024 confirmed real economic (GDP) growth

Its official. The figures came in yesterday from the International Monetary Fund. NZ had one of the world's worst performing economies in 2024, coming in at 183rd out of 196 nations. New Zealand and a tiny handful of other nations have shrinking GDP.

Dan Brunskill: The Coalition Government promises an economic growth plan within weeks.....

The Coalition Government promises an economic growth plan within weeks, but can it deliver results?

It is awkward for a Government, elected to get the economy back on track, to have spent its first full year in office watching output shrink almost $2 billion in inflation adjusted prices.

2024 was a year of recession by any definition of the word, although a more useful definition would show the New Zealand economy has been in a recession since September 2022.

Professor Robert MacCulloch: Hipkins Put New Zealand Bottom of Asia Pacific Economies in 2023.....

The IMF confirms that Labour Leader Chris Hipkins Put New Zealand Bottom of Asia Pacific Economies in 2023.

New Zealand was governed in 2023 by former PM Chris Hipkins, and before him, of course, Jacinda Ardern. How did they do, especially in comparison with other nations in our Asia Pacific region of the world? The IMF has released the figures.

Professor Robert MacCulloch: Holiday Reading Advice for Finance Minister Willis....

Holiday Reading Advice for Finance Minister Willis: go buy a book on 'Expansionary Fiscal Contractions'.

This week at a Select Committee Hearing the Finance Minister was asked whether she knew of any evidence that fiscal consolidations could expand an economy. Willis couldn't answer. I'm not sure why a Blog has to do the work of her many advisers & several hundred folks in the NZ Treasury, but what the heck, here goes.

Damien Grant: Nicola Willis needs to make drastic course corrections to tackle rising debt

It’s been a busy week. We lost a navy boat off the coast of Samoa, the Americans merged their election and hurricane season and Adrian Orr over-corrected a change in the OCR to correct for his previous overcorrection.

Meanwhile, our fiscal affairs are beginning to look a bit like HMNZS Manawanui. Underwater.

Michael Reddell: Central bank policy communications

For a long time I’ve been a strong supporter of central bank transparency about stuff a central bank actually knows something about, but a sceptic of the faux transparency of publishing stuff a central bank really knows very little about. In the former category, one might think of the background papers going to the MPC (by aiming deliberately low I once got them out of the Bank for a forecast round 10 years previously, but good luck if you asked now for the papers around the 2020 and 2021 decision-making, let alone those from six months ago).

Frank Shostak: Is GDP an Accurate Measure of Reality?

To gain insight into the state of an economy, most economists rely on a common statistic named the Gross Domestic Product (GDP). The GDP looks at the value of final goods and services produced during a particular period, usually a quarter or a year.

Using this measurement statistic assumes that what drives the economy is not the production of goods and services, but rather consumption. In GDP, what matters is the demand for final goods and services. Since consumer outlays are the largest part of the overall demand, it is commonly held that consumer demand is the key productive factor in the economy. Because the supply of goods is taken for granted, this framework ignores the various stages of production that precede the emergence of final goods.

Dr Bryce Wilkinson: Some puzzles about this week’s OCR reduction

This week the Reserve Bank of New Zealand’s Monetary Policy Committee (MPC) lowered the Official Cash Rate (OCR) from 5.50% to 5.25%.

Many market economists predicted this change. So did Massey University’s AI-based GDP tracker, GDP Live. Borrowers will be pleased. Those needing interest income, less so.

Professor Robert MacCulloch: The Reserve Bank throws truth out the window......

The Reserve Bank throws truth out the window: its Monetary Policy Statement would make a Propaganda Chief from a Third World Dictatorship Blush

New Zealand is the only country in the world I know of in the midst of what is now shaping up to be a "triple dip recession". GDP growth forecasts have been downgraded. Our GDP is now expected to barely change in 2024 - only by about +0.2% and to drop by -0.4% next year. By comparison, Global Economic Growth is running at 3.2% this year, and is expected to rise to 3.3% next year. The latest updated GDP growth numbers put NZ at around 183th position out of 190 nations, one of the slowest growing on the planet.

Point of Order: Buzz from the Beehive - 21/6/24

World media report on our latest GDP stats – but RBNZ chairman’s reappointment was too trivial even for the govt’s website

We didn’t learn about it from the government’s official website (which contained no fresh news since we reported yesterday when we checked its contents an hour ago).

But we were tipped off that Finance Minister Nicola Willis had announced the reappointment of Professor Neil Quigley as Chair of the Reserve Bank of New Zealand Board for a further term of two years, until 30 June 2026.

Point of Order: Buzz from the Beehive - 20/6/24

Shane Jones and Tama Potaka invite Maori troughers to slurp into a $20m swill and Jones tells us his focus is on … guess what?

Three of the latest posts on the government’s official website result from the Prime Minister’s trip to Japan, aided and abetted by Air New Zealand stepping in to provide transport for him and his entourage after their Defence Force aircraft got them no further than Papua New Guinea.

Michael Reddell: Comparing Treasury and Reserve Bank forecasts

I put a range of charts on Twitter late last week illustrating why, from a macroeconomic perspective, I found the government’s Budget deeply underwhelming. I won’t repeat them but will just show two here.

The first is the Treasury’s estimate of how the bit of the operating deficit not explained just by swings in the economic cycle change from 2023/24 (which was largely determined by last year’s Labour Budget) to 2024/25 (influenced by this year’s Budget choices)

Point of Order: Buzz from the Beehive - 21/3/24

Willis is undeterred by GDP slowdown and IMF advice, although she is talking of “tax relief” rather than tax cuts

One minister is talking tough while a colleague – whose ministry had acted tough and drawn a barrage of flak – has shown an official softening.

Some ministers are doing what Labour was good at, which is distributing public funds to causes regarded as worthy or needy, while another has portended the prospect of a contentious Labour decision – to shut down the Marsden Point oil refinery – being reversed.

Point of Order: Buzz from the Beehive - 15/12/23

It’s Judith Collins, KC, (among other things) now – and here’s hoping she has noted what happened to Sir Francis Bacon

What does Judith Collins have in common with Sir Francis Bacon? Oh – and with former Labour cabinet ministers Sir Geoffrey Palmer and Martyn Finlay?

All served as Attorney-General in their respective countries, but Sir Francis, Sir Geoffrey and Finlay also were King’s or Queen’s Counsel.

Heather du Plessis-Allan: The GDP numbers confirm what we're all feeling

It's fair to say that the GDP figures out this morning came as a shock- it's a lot weaker than economists were expecting.

Economists were tending to forecast a bit of growth, around 0.2 percent to 3 percent, and instead what they saw was the economy slumped 0.3 percent for the third quarter, which is July through to September.

And if you calculate it per capita to account for all the extra people who arrived here during that time, it's even worse- the slump is 0.9 percent, which is actually quite material. 

Robert MacCulloch: NZ's Big News Story should be "Treasury Pre-Election Update shows plummeting consumption per capita"

I can't make sense of the Finance Minister's statements today regards the "Pre-Election Economic and Fiscal Update" by the NZ Treasury. He claims the country is in better shape than expected and that the "forecasts showed New Zealand would avoid recession, with wages keeping ahead of inflation".

So here's my question - GDP growth up to June 2024 is forecast to be just over 1% (the forecast has been raised slightly from 1.0 to 1.3%). On the other hand, it is also stated immigration is now running at 100,000 a year, corresponding to an increase in 2% of our entire population. But if total GDP is only growing at a bit over 1% and the population is growing at 2%, then GDP per capita must be declining (since GDP per capita equals total GDP over population size).

Robert MacCulloch: Has Grant Robertson got a hole in his forecast for 5 million Kiwis....

.....but not for 100,000 immigrants?

I can't make sense of the Finance Minister's statements today regards the "Pre-Election Economic and Fiscal Update" by the NZ Treasury. He claims the country is in better shape than expected and that the "forecasts showed New Zealand would avoid recession, with wages keeping ahead of inflation".

Point of Order: Are politicians turning a blind eye to the hard times hitting farmers and other foreign- exchange earners?

New Zealanders – as they launch into the general election campaign – at the same time will have to confront the harsh realities the economy presents. Already Opposition politicians are blaming the Labour government for the state of our economy and certainly it must shoulder some of the blame.

Robert MacCulloch: New IMF data ranks NZ's GDP growth as worst out of 159 nations in world along with Equatorial Guinea

What has PM Hipkins done? The newly released IMF Regional Economic Outlooks say NZ is projected to be the worst performing economy in the entire world in 2024 in terms of GDP growth, with one exception, Equatorial Guinea, which has been ripped apart by civil war. No other time in our history has NZ been bottom of the planet.