Welcome to the last issue of the BNZ Weekly Overview for 2009
The end of the year is almost upon us and because I am on leave next week this will be the last WO edition for 2009. So this week we take a look at the things we feel we have done a good job on this year – the housing market and interest rates – and where things were either wrong (tourism hugely better than we thought) or astray because of inherent unforecastability – the exchange rate.
We also run through a list of things we think are likely to happen next year while continuing to emphasise that although NZ growth prospects look quite good, there remains massive uncertainty regarding how the world economy will track – or at least the non-Asian part.
This week the NZD fell below US 71 cents for a while but it has ended today near 72.5 driven back up by the Reserve Bank changing their stance on cash rate rises next year. They are now speaking in terms of rate rises starting in the middle of 2010 rather than the second half. In September their language was around the latter part of 2010. Wholesale interest rates have therefore risen today and the NZD has recovered from a three month low against the greenback.