Scoop has an Ethical Paywall
License needed for work use Register

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


NZ Economy: Storm Clouds Building

The latest BusinessNZ Planning Forecast reveals that while things might look favourable at first, there are several factors which are still cause for economic concern.

Both Treasury and the Reserve Bank have predicted the economy will go into a shallow recession by the second half of next year. BusinessNZ’s forecast for the December 2022 quarter aligns with this prediction.

BusinessNZ Chief Executive Kirk Hope says household spending is set to be slashed, with mortgage-holding Kiwis in for a tough time in particular.

"Inflation remains well above the Reserve Bank’s 1-3 percent target and interest rates are set to soar in the new year, meaning many households will not feel the full impact until mortgages start to be refixed from 2023.

"Combined with elevated levels of household debt, increased mortgage payments will potentially put significant pressure on people and their budgets, even more so when our record low unemployment level starts to rise again."

Internationally, the global economic outlook has deteriorated with both continuing geopolitical risks and supply chain disruption.

"There is some evidence of inflationary pressures declining in some key markets like the United States, while international oil prices have taken a dive largely on the back of recession fears," Mr. Hope says.

The BusinessNZ Economic Conditions Index sits at 0 for the December quarter, down 6 on the previous quarter and down 1 on this time last year. Continuing low levels of business and consumer confidence, combined with entrenched inflationary expectations and rising interest rates, are continuing to take a toll on the index.

The Index tracks 33 economic indicators including GDP, export volumes, commodity prices, inflation, debt, and business and consumer confidence.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

© Scoop Media

Advertisement - scroll to continue reading
Business Headlines | Sci-Tech Headlines

FMA: MAS To Pay $2.1M Penalty For Making False Representations

Following proceedings brought by the FMA, MAS has been ordered to pay a $2.1M penalty for making false and/or misleading representations to some customers. MAS admitted failing to correctly apply multi-policy discounts and no claims bonus discounts to some customers, failing to correctly apply inflation adjustments on some customer policies, and miscalculating benefit payments. More

IAG: Call On New Government To Prioritise Flood Resilience

The economic toll of our summer of storms continues to mount, with insurance payouts now topping $1B, second only to the Christchurch earthquakes. AMI, State, & NZI have released the latest Wild Weather Tracker, which reveals 51,000 claims for the North Island floods & Cyclone Gabrielle, of which 99% (motor), 97% (contents), and 93% (home) of claims have now been settled. More


Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.