Welcome to the November 18 issue of the BNZ Weekly Overview
We have not learnt much new about the NZ economy over the past week apart from some reasonable strength in retailing spending during the September quarter which was probably due mainly to pre-GST increase buying. Most attention in the finance world this week has been on two things offshore. First there is the collapse of investor confidence in the ability of the Irish government to meet its debt obligations and their seemingly inevitable but very unwilling trek to their EU partners and maybe the IMF to ask for special assistance.
The other focus of attention was high inflation in China, talk of controls on food prices, and worries about ham-fisted efforts to suppress inflation which could lead to a rapid slowing of economic growth with inevitable consequences for commodity prices. These worries frankly seem to be present most of the time, but at the moment the 4.4% inflation rate makes them more pressing.