Kiwibank economists: More Official Cash Rate cuts needed amid slow recovery, global risks
Kiwibank economists are calling for more cuts to the Official Cash Rate as the economy continues to crawl out of a “deep, deep hole”, and as trade tensions and slowing demand offshore hit “just as confidence begins to lift”.
Economists at the state-owned bank released their bi-annual outlook note this morning, with forecasts and recommendations from interest rates to inflation, housing to the labour market, and trade.
“We are getting closer to the bottom in interest rates”, wrote chief economist Jarrod Kerr, senior economist Mary Jo Vergara and economist Sabrina Delgado.
They believe the Official Cash Rate (OCR) needs to fall another 75 basis points to reach 2.5%, starting with a 25bp cut to the OCR next month or in August, and a second 25bp cut by the end of the year.
Wholesale markets had only one more 25bp cut by the Reserve Bank (RBNZ)priced, which would only lower the OCR to 3%.
The truth is, that thanks to National and their slash and burn policy, we are in worse shape than when Labour were spending to protect us from Covid.
The recently announced $13.5million for tourism was just desperate mad dash advertising using false 100% Pure greenwashing because the exodus of skilled workers to Australia (thanks to National killing off all public housing and infrastructure work pipelines) is tanking the economy far worse than we should and this Government will throw money at any get rich quick scheme.
Labour is good for capitalism.
National is good for the capitalists.
NZ’s economy is not underperforming by accident
The truth is NZ is two massive sparsely populated Islands and because of the lack of population density, the dynamics of competition that make free market capitalism work well in some places don’t work here!
The State has always had to be the foundational stone in anything and everything we do.
They are the base 30% when we require 40%.
Nicola Willis is a wide eyed NZ Initiative Free Market Acolyte, she believes as a matter of faith that when you cut out the State, the market steps in and does it cheaper. People complain these terrible budget cuts offer no actual economic plan, what they miss is that Willis is such a free market devotee, the steep cut backs ARE Â the economic plan!
For a fourth month in a row the Business Confidence has dropped because they are realising that National isn’t ruling for them, they are ruling for their donors interests and those are 2 very different thongs.
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The race to the bottom is well on its path .The only bright light in the economy is the Maori economy due to its inclusiveness of all the people along the way not just the doner interests like the coalition .
I see the claytons PM is jetting away on another holiday so I am expecting the boot to be put into Maori and the homeless in the next day or two ,as always happens when he is hiding behind an overseas trip .
Willis needs to shift that fat arse and sit up straight and pay attention .She is about to watch the free market destroy the world .The oil barons have started a war with the oil states so she will see all that imported inflation flood into NZ .
sHE MAY NEED TO SHUT THE WHOLE OF THE GOVERNMENT DOWN UNDER HER THINKING BUT THAT WONT SAVE HER .She and her tame RBNZ governor will not be able to stop rampant inflation thats coming .The only saving grace is we will have another 500k people leave in the next year so we will need to import less food .
And now Crook wants to do this. Hideous from a childless wench…
https://www.rnz.co.nz/news/political/564245/government-looking-at-cutting-sick-leave-entitlements-christopher-luxon-says
This CoC just aren’t interested in it’s people. 5 days a year to cover yourself and your family, a decision made by someone that has no impact on themselves. A disgusting 8% minister.
Growth when your not having growth is just another National party dumb idea in practice. Nicola Willis a real live Claytons finance minister.
I was right Luxon has instructed Crooke van veldan to cut sick leave while he is swaning around in china and europe .
Correct Gordon.
“because of the lack of population density, the dynamics of competition that make free market capitalism work well in some places don’t work here!”
If only it were so. The fault is not in our geography but in our nontrepreneurs. Under successive corrupt governments, it has always been easier to make an end run around public goods and glom desperately needed public funding than to compete on merit. The purloining of the school lunch program is only a recent example. It has been easier to grow rich on the capital appreciation of an inflating property market than to cultivate and preserve productive industries. Lazy irresponsible parties kowtow to Chicago schooled economic non-performers in Treasury because they are too ignorant to know any better.
They are not fit to govern. They are barely fit to be paperweights, doorstops, or coffee table ornaments.
There will be no growth under these wretched fools, and there is no reason whatsoever that we should continue to pay them, since they lack the integrity to step down.
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