Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


BNZ Weekly + Offshore Overviews, 23/10/08

Welcome to the October 23 2008 editions of the BNZ Weekly Overview and Offshore Overview.

The week started on a positive note internationally with evidence of the credit crisis easing causing rallies in sharemarkets. But surging concern about corporate earnings and the depth of the recession has seen markets decline. Because the Kiwi dollar is viewed as a risky asset this means that whereas we were trading above 62.0 cents earlier in the week we have finished close to 59 cents this afternoon with further downside likely in coming months as the Reserve Bank follows up this morning's 1% cut in the official cash rate with another 0.5% cut in December. The cash rate is likely to bottom out near 5%.

During the week data have appeared showing declining numbers of Kiwi's travelling overseas for holidays and a worsening decline in the number of visitors to New Zealand. We repeat our warning that the tourism sector is likely to take a significant hit over the coming year as consumers offshore close their wallets in an environment where they have seen their wealth decline sharply and where unemployment rates are likely to rise quite substantially. New Zealand retailing and housebuilding prospects also look particularly poor.

But we mustn't forget that our economy does have some insulation from falling petrol prices which are now only just above levels of a year ago, slowly falling interest rates, a lower exchange rate, easing fiscal policy, and long overdue infrastructure spending - hopefully some which might stop the continuing painful increases in electricity prices. Local authority rates which only rose at the rate of inflation or less would also be helpful to New Zealand household budgets.


© Scoop Media

Business Headlines | Sci-Tech Headlines


By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>


Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>


Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>


Divesting: NZ Super Fund Shifts Passive Equities To Low-Carbon

The NZ$35 billion NZ Super Fund’s NZ$14 billion global passive equity portfolio, 40% of the overall Fund, is now low-carbon, the Guardians of New Zealand Superannuation announced today. More>>


Split Decision - Appeal Planned: EPA Allows Taranaki Bight Seabed Mine

The Decision-making Committee, appointed by the Board of the Environmental Protection Authority to decide a marine consent application by Trans-Tasman Resources Ltd, has granted consent, subject to conditions, for the company to mine iron sands off the South Taranaki Bight. More>>