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iPredict New Zealand Weekly Economic & Political Update

IPREDICT LTD

New Zealand Weekly Economic & Political Update

Tuesday 21 April 2015

FOR IMMEDIATE RELEASE

www.ipredict.co.nz

NATIONAL/NZ FIRST GOVERNMENT PICKED – BUT WITHOUT JOHN KEY?

The probability of a National Party prime minister after the next election has reached 58% but he or she would govern only with the formal or tacit support of NZ First which would hold the balance of power, according to the combined wisdom of the 8000+ registered traders on New Zealand’s predictions market, iPredict. Moreover, that prime minister may not be incumbent John Key, with traders giving him just a 35% probability of being leader of the National Party by the end of 2017. Paula Bennett remains favoured to replace him, with 44% probability, well ahead of Steven Joyce on 12%. Gerry Brownlee is expected to be the next Speaker of the House of Representatives, replacing David Carter who appears set to replace Sir Lockwood Smith as New Zealand’s next High Commissioner to the United Kingdom. David Cameron is narrowly picked to cling on as prime minister of the UK, while Tony Abbott is expected to hold on in Australia. Hillary Clinton remains favoured to be the next president of the United States. Boris Johnson has a 30% probability of being UK prime minister by 2020.

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New Zealand Politics:

John Key is expected to remain National leader until at least the end of 2016 (90% probability, steady compared with last week) but has just a 35% probability of remaining National leader until at least the end of 2017 (down from 37% last week). Mr Key has a 73% probability of being National leader on Nomination Day before the next General Election (steady compared with last week)

Andrew Little is expected to remain Labour leader until at least the end of 2016 (83% probability, up from 80% last week) and has a 64% probability of remaining Labour leader until the end of 2017 (up from 63% last week). Mr Little has a 85% probability of being Labour leader on Nomination Day before the next General Election (up from 73% last week)

• Paula Bennett remains the clear favourite to become National Party leader if a vacancy arises (44%, steady compared with last week), followed by Steven Joyce (12%, steady) and Amy Adams (10%, steady)

• Stocks on who is favoured to become Labour Party leader if a vacancy arises will be launched in the near future

• Kevin Hague remains strongly expected to be the next co-leader of the Green Party (78% probability, down from 79% last week), followed by James Shaw on 21% (steady)

Judith Collins is not expected to be appointed to Cabinet before next election (43% probability she will be, down from 53% last week)

• Tim Groser is expected to be New Zealand’s next Ambassador to the United States (96% probability, up from 91% last week) andMaureen Pugh is expected to become eligible to be a list MP before the next election (95% probability, steady)

Phil Goff is expected to stand for the Auckland mayoralty (94% probability, up from 91% last week)

Next election expected in 2017 (91% probability, down from 92% last week) with a turnout of 75% (steady)

• Forecast party vote shares at next election:

o National 43.8% (steady compared with last week)

o Labour 33.1% (steady)

o Greens 10.8% (steady)

o NZ First 7.5% (up from 7.4%)

o Others 4.8% (steady)

• NZ First has a 68% probability of holding the balance of power after the next election (steady compared with last week). If NZ First does hold the balance of power, there is a 52% probability it will back National on confidence and supply (steady compared with last week), a 32% probability it will back Labour on confidence and supply (steady) and a 16% probability it would sit on the crossbenches (steady)

• National prime minister expected after 2017 General Election (58% probability, up from 54% last week)

• David Carter is expected to be New Zealand’s next High Commissioner to the United Kingdom (79% probability, steady compared with last week) and Gerry Brownlee has a 62% probability of being the next New Zealand Speaker (up from 48%)

• Almost no chance Wellington councils will be amalgamated by end of 2015 (only 5% probability they will be, steady compared with last week)

New Zealand Business & Economics:

• Fruit-fly outbreak expected to be contained with fewer than 20 Queensland fruit-flies expected to be found in New Zealand as part of current outbreak (92% probability, up from 89% last week)

• New Zealand dollar expected to reach parity with Australian dollar by the end of 2015 (82% probability, up from 79% last week), with a 79% probability if will do so before July 2015 (up from 69% last week)

• Quarterly GDP growth expected to be:

o 0.76% in the March quarter (steady compared with last week)

o 0.65% in the June quarter (steady)

o 0.86% in the September quarter (steady)

o 0.85% in the December quarter (steady)

• Annual growth expected to be 3.15% in the 2015 calendar year (steady)

• Unemployment expected to be:

o 5.44% in the March quarter (up from 5.42% last week)

o 5.29% in the June quarter (steady)

o 5.25% in the September quarter (steady)

o 5.37% in the December quarter (up from 5.30%)

New Zealand pay gaps in 2014/15 expected to be:

o Gender 9.95%

o Maori 12.28%

o Pacific 23.12%

o Asian 20.43%

• Current account deficit expected to be:

o 3.61% of GDP in the March quarter (steady compared with last week)

o 3.56% in the June quarter (steady)

o 3.39% in the September quarter (steady)

o 3.49% in the December quarter (new stocks)

• Annual inflation expected to be:

o 0.33% to end of June 2015 quarter (down from 0.42% last week)

o 0.52% to end of September 2015 quarter (down from 0.61%)

o 0.83% to end of December 2015 quarter (down from 1.04%)

• Stocks on 2016 inflation will be launched in the near future

• Official Cash Rate priced to be:

o 3.495% on 30 April (up from 3.494% last week)

o 3.482% on 11 June (up from 3.481% last week)

o 3.457% on 23 July (up from 3.456%)

o 3.409% on 10 September (up from 3.406%)

o 3.391% on 29 October (up from 3.387%)

o 3.370% on 10 December (up from 3.366%)

o 3.360% on 28 January 2016 (up from 3.356%)

o 3.357% on 10 March 2016 (up from 3.354%)

o 3.347% on 28 April 2016 (up from 3.344%)

o 3.335% on 9 June 2016 (up from 3.331%)

• This implies the OCR is more likely than not to be cut on 10 December 2015 to 3.25% (steady compared with last week) and to remain at that rate until at least 9 June 2016 (steady)

• Stocks on Australian interest rates are now available for trading

• 7% probability of a fiscal surplus in 2014/15 (up from 6% last week)

• Fiscal balance expected to be:

o -0.29% of GDP in 2014/15 (down from -0.28% last week)

o 0.68% of GDP in 2015/16 (down from 0.72%)

o 1.79% of GDP in 2016/17 (down from 1.98%)

o 2.15% of GDP in 2017/18 (down from 2.32%)

Fonterra’s final payout (before retentions) expected to be:

o $4.67 in 2014/15 (down from $4.71 last week)

o $5.35 in 2015/16 (down from $5.40)

o $6.10 in 2016/17 (down from $6.16)

• Campbell Live expected to be cancelled this year (73% probability, down from 77% last week)

• Stocks on tourism arrivals and gender and ethnic pay gaps are now available for trading

Foreign Affairs/Constitution:

Next UK Parliament expected to consist of:

o Conservatives 42.6% of seats in the House of Commons (down from 43.0% last week)

o Labour 39.6% of seats (down from 40.3%)

o Nationalist parties 8.0% of seats (up from 7.6%)

o Liberal Democrats 4.0% of seats (down from 4.1%)

o UKIP and similar 3.8% of seats (up from 1.0%)

o Green and similar 1.0% of seats (steady)

o Independents and Speaker 1.0% of seats (steady)

o Unionist parties 0.0% of seats (down from 1.0%)

o All others 0.0% of seats (down from 1.0%)

• David Cameron narrowly expected to be prime minister after next UK election (53% probability, down from 57% last week)

Boris Johnson expected to be elected to UK House of Commons this year (99% probability, steady compared with last week) and has a 30% probability of being prime minister before 2020

• Socialist Workers’ Party expected to defeat People’s Party in next Spanish election (67% probability, down from 73% last week)

• All Eurozone countries, including Greece, expected to remain in Euro in 2015 (20% probability of an announcement of a departure this year, steady compared with last week)

• Tony Abbott expected to remain leader of the Australian Liberal Party until 1 July 2015 (only 2% probability of departing before then,down from 5% last week) and narrowly expected to be leader of the Australian Liberal Party on nomination day (53% probability, up from 30% last week)

Bill Shorten expected to be Labor leader at next Australian Federal election (89% probability, steady compared with last week)

• Liberals marginally ahead of Labor for next Australian Federal election in 2016 (53% probability of Liberal win, steady compared with last week)

• Hillary Clinton is favoured to be the Democratic Party’s nominee for US president in 2016 and to be elected to that office (54% probability, up from 52% last week). Jeb Bush has a 40% probability of being the Republican nominee (steady compared with last week) followed by Scott Walker (23% probability, up from 21%) and Rand Paul (15% probability, steady)

• There is a 21% probability New Zealand will sign the Trans-Pacific Partnership this year (down from 35% last week), and the Trans-Pacific Partnership is not expected to be ratified by the US Congress before 1 July 2017 (only 38% probability it will be, up from 29% last week)

• Helen Clark’s prospects of being the next UN Secretary General are 35% (up from 26% last week)

• There is a 10% probability New Zealand will become a republic by 2020 (steady compared with last week)


ends

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