Post on 22-Feb-2016
description
New Zealand economic outlook
Grant SpencerReserve Bank of New ZealandSeptember 2012
Eriksens ActuarialAuckland, 25 September 2012
...and this presentation is not financial advice
Off the record please…
Trading partner GDP growth (annual)
Weaker global outlook
2005 2007 2009 2011 2013 -6
-4
-2
0
2
4
6
8
10
12
-6
-4
-2
0
2
4
6
8
10
12% %
United States
Australia
Asia ex-Japan
Euro area
Projection
Financial markets supported by Central Bank actions
0
5
10
15
20
25
30
35
2004 2005 2006 2007 2008 2009 2010 2011 2012
Central Bank Assets - % of Nom. GDP
ECB
Fed
BoE
Reflected in lower bond yields
5
0
1
2
3
4
5
6
7
8
0
1
2
3
4
5
6
7
8
2010 2011 2012
10-year Government Bond Yields
NZ USGermany ItalySpain
% %
Global risk appetite is supporting NZD
6
2400
2500
2600
2700
2800
2900
3000
3100
3200
3300
60
62
64
66
68
70
72
74
76
Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12
NZD vs Global Equities
NZ TWI MSCI World Index
Which is holding back export growth
7
Export volumes
2008 2009 2010 2011 2012 70
80
90
100
110
120
70
80
90
100
110
120
Index Index
Total
Travelservices
Global developments are slowing NZ’s progress
8
• Weaker world demand and commodity prices
• High NZD putting pressure on export sector
• Offshore funding for banks easier but still expensive
Consumption stronger but savings continue to recover
9
2004 2006 2008 2010 2012 2014 -10
-8
-6
-4
-2
0
2
4
-3
-2
-1
0
1
2
3
4
5
6
7
% % of disp. income
Household savingrate (RHS)
Annual averageconsumption
growth
Household saving rate and consumption
Reflected in weak credit – strong deposits
Annual bank credit and deposit growth
10
2005 2006 2007 2008 2009 2010 2011 20120
2
4
6
8
10
12
14
16
18
0
2
4
6
8
10
12
14
16
18
% %
Retail fundinggrowth
Household creditgrowth
Strong recovery in residential investment
11
Residential investment
2005 2007 2009 2011 2013 2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
% of potential % of potential
Total
Ex-Canterburyrebuild
Projection
Stronger house prices – for a period
12
Annual house price inflation
2005 2007 2009 2011 2013 -15
-10
-5
0
5
10
15
20
-15
-10
-5
0
5
10
15
20% %
Projection
Nationwide
Christchurch
Government consolidatingFiscal impulse (share of nominal GDP)
13
2008 2009 2010 2011 2012 2013 2014 2015-3
-2
-1
0
1
2
3
4
5
-3
-2
-1
0
1
2
3
4
5% %
Projection
Net result: gradual recovery in GDP growth
14
GDP growth (annual)
2005 2007 2009 2011 2013 -4
-3
-2
-1
0
1
2
3
4
5
-4
-3
-2
-1
0
1
2
3
4
5% %
Projection
Inflation pressures remain moderate
15
Consumer price inflation
2005 2007 2009 2011 2013 0
1
2
3
4
5
6
0
1
2
3
4
5
6
% %
Projection
Interest rates remain flat
16
90-day interest rate
2005 2007 2009 2011 2013 0
1
2
3
4
5
6
7
8
9
10
0
1
2
3
4
5
6
7
8
9
10
Sep
Projection
% %
JuneMPS
MPS
End of presentation
Public debt overhang remains a major issue
18
Gross government debt as percent of GDP
(IMF WEO, April 2012)
Greece Italy Portugal France Spain Ireland US NZ Australia0
20
40
60
80
100
120
140
160
180
0
20
40
60
80
100
120
140
160
180
200720112014
% %
European bond rates:convergence -divergence
0
2
4
6
8
10
12
14
16
18
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
10-year government bond yields
PortugalIrelandItalySpainFranceGermany
Euro begins trading
Canterbury rebuild profile
2011 2013 2015 2017 20190.0
0.4
0.8
1.2
1.6
0.0
0.4
0.8
1.2
1.6
% %
Canterbury rebuild profile (share of potential GDP)