Browse by publication topic: economy

Like much of the world, New Zealand’s economy is still feeling the lingering consequences of the global financial crisis and the hang-over of its own asset price bubble. The economy is recovering slowly. In the last few years, households have spent cautiously and paid down mortgages. This was an adjustment that needed to happen. But net foreign liabilities are still very high and recent credit growth raises concerns that the adjustment has not been enough. Major action will be needed to contain the ageing-related growth in government spending that is about to hit us, and lift economic growth. Steps have been made in the right direction, but further reforms are needed. New Zealanders need to be prepared to make sacrifices in the short run to make progress in the long run. The longer we delay action, the bleaker our prospects.

In 30 years’ time New Zealanders will be choosing to retire at least three years later than we do now. Living longer means working longer. We will want to save more for our retirement as our life expectancy increases. Working longer will also be more attractive as an ageing population will drive up wages. In NZIER’s latest research paper, we quantify the impact of an ageing population on future wages and interest rates, and people's savings and retirement decisions.

The New Zealand economy is recovering gradually from a long recession. 2013 will be another challenging year, but better than 2012.
Findings from the MYOB Business Monitor. A report by NZIER for MYOB.

Before Graeme Wheeler starts his new job as Governor of the Reserve Bank, he must sign a new Policy Targets Agreement (PTA) that sets the goalposts for monetary policy. This is an opportunity to introduce macro-prudential tools to help ease the exchange rate impact of inflation targeting.

Consumers, supermarkets and distributors in Germany and the United Kingdom have been demanding reduced chemical use on fruit. The innovative growing programme ‘Apple Futures’ brought scientists and growers together to figure out how to reduce sprays and residues while producing export-quality fruit. Analysis from NZIER found that the research programme preserved between $25m and $35m per year of industry net income from 2008 to 2011, at a research cost of $3.2m. In just four years, the apple industry earned up to an extra $113m by reducing chemical residues to one-tenth of the maximum set by the European Union.

The Canterbury earthquakes have disrupted lives and the economy. This Insight brings together key economic indicators to provide a second snapshot of the economic disruption.   We find encouraging signs of stabilisation.

New Zealand struggles to grow its economy partially due to its small size and remote location. There is little that can be done to change location, but the size can be increased over time. It is feasible to adopt a population policy with the aim of the population reaching 15 million in the next 50 years – an annual growth rate of 2.5% per annum. This would bring the size and density of the population to levels closer to more prosperous European countries. Fifteen million – two and a half times current projections – is a good target, too, as it allows for several large cities, fostering competition within New Zealand.

The Canterbury earthquakes have disrupted lives and the economy. This Insight brings together key economic indicators to provide a snapshot of the economic disruption. The true cost of the disaster will not be known for some time. The immediate clean-up and reconstruction is boosting demand in certain sectors like utilities, construction, safety, healthcare and social assistance. These have not fully offset reduced activity in other sectors.

An occasional column for the Dominion Post newspaper.
The debt crises in the US and Europe are a collision of political wishful thinking and economic reality. Jean-Pierre de Raad writes that New Zealand would do well to face its own fiscal demons now.

In Tracking the Economy, NZIER's weekly column for the National Business Review.

What do New Zealand’s musical preferences suggest about the economic outlook for 2011? Using a highly scientific method, our in-depth analysis of the current New Zealand Top 10 songs aligns well with our take on the economy. The outlook is mixed and messy, much like the tunes played by a drunken DJ.

An occasional column for the Dominion Post newspaper.

New Zealand is nowhere near the perilous economic position of Europe.  But the recent downgrade by Standard & Poor’s is a timely reminder that in a sick world, we can’t afford to cough.  We need to change our diet and our lifestyle writes Jean-Pierre de Raad.