Another recession for NZ still a strong possibility – economist
A rebound in business activity alongside strong building approvals data is not enough for TD Securities to change its mind about New Zealand’s immediate economic future.
“We have been flagging the notion of a triple dip recession for some time, with a necessary and sufficient condition that Sept qtr GDP contracts. Indeed GDP fell -0.4%, very close to our below-consensus forecast,” TD Securities head of Asia Pacific Research Annette Beacher said.
"On our preliminary calculations, [the] December quarter isn’t looking much healthier, outside of the Canterbury reconstruction effort, hence another 'recession' for New Zealand remains a strong possibility."
Nevertheless, she said, this morning two pieces of “good news” were released, with a rebound in activity reported for the December quarter by New Zealand businesses in NZIER’s Quarterly Survey of Business Opinion and a “welcome rebound” in building approvals for November.
“November building approvals rose a healthy 8.8%, skewed entirely towards apartments (increasing threefold to +200 approvals). While any sort of building activity is welcome news for an economy that is flat-lining at best, building approvals have averaged 1300/mth for the last year now with no real discernable upward trend,” Ms Beacher said.
She added that her view remains that the Reserve Bank can hold official interest rates steady at 3% until July and called for RBNZ governor Alan Bollard to “just say 'monetary policy is appropriate' rather than leave the tightening bias on the table, no matter how watered down.“
The RBNZ will next review the official cash rate on January 27.
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Comments and questions16
Annette Beacher is correct.
Canterbury will struggle to recover. The "Word Cup" Revenues will be less than expected. Both will fail to realise the economic potential. The reason for this is that the Emissions Tax Scam, currently, provides an effective GST rate of 19.94% and is focal to a stalling economy (due to its predicted pain). The misrepresentation has illuminated via the dissappointment people have shown with what they have not received through the supposed fiscal "neutrality" with the tax cuts.
Canterbury contractors, builders and so on will struggle to carry the excessively/suprisingly high costs of repairs in lue of being paid. The recovery effort will be very difficult from a practical. Economically Key is depriving chances for each and every business, in Canterbury, by and stifling them with this transaction based fraud. Crocodile concerns. World Cup; Tourists will, as is already stewing regard NZ as over priced inhibiting any expenditure. They'll come to the world cup. They won't spend much.
This medium term issue for NZ on the whole though is that Nick Smith, UN mole, though envisages a doubling of the Emissions Tax post-election 2011. Should this occur with another GST-hike through the Tax "Saving" group intent, it's game over NZ. The effective GST rate then becomes 29.96% (CPI 0.9 to 1.1%) [+/- 1.5%] where any rhetoric-excuse will be used to lift interest rates. New Zealand will once again will become a world first should the rate hike +30%. Do the math.
From another anglke; Lunatic Brown also seeks in-roads into income-based-poll taxation at the council level under the guise of "fairness". Its all bad news with his UN initiatives. Note- The the very purpose of the tax "working and or "savings" group, the Super City is to define new ways of diversifying taxation away from easy to understand income/GST based tax to the traditionally unfamiliar: difficult to object to something not understood. Tax/rates payers are now being pummelled with multitudes of small amount/new 'levvies' designed to be 'overlooked' or ignored through a lack of understanding. Death by a 1000 taxes philosophy.
The 2011/2012 result being; continued attrition of small business failure will be characterised by a rapid decline in GDP and rapid uplift in unemployment. However, with the taxation shifts, every living transaction becomes state-revenue - an ironic fundamental shift in taxation gain contained with the UN manual on running earth. i.e. those that don't want to live - don't pay tax.
Short term: Come mid-2012 - NZ will then be unable to repay its growing international debt obligations. To solve this; Shon-Key will then mute his goal of a single economy with Australia which, if you read his mantra, is what he means by "closing the gap"....literally.
The interim, do you call it double dip recession or triple dip?
Well, if you combine the EU/NAU/IMF/UN game occurring all around the globe, Portugal next, you'll find the word depression would be a flattering expression. Then you have the US's QE2 titanic. Go check NZ's Sovereign austerity clauses on the $ 300m per week.
Sovereign surrender through designed economic ruin? Hedg3e your bets folks.
Simon forgot tp mention that my cat recently died and my wife got genital herpes
Yes, lets quickly join up with Aussie and ride the ripcurl to economic prosperity as a state of OZ
Hey, those codes are C R A Z Y
WSJ doesn't worry commentators with such CRAP security. Why make it hard for punters to make a comment?
Sounds like Simon M got out of the wrong side of bed this morning and then forgot to take his happy pill before work.
To say that World Cup based revenues will fail to meet expectations is taking a pretty narrow minded and pessimistic view of what will be the greatest sports event this country will experience ..... ever.
Re Trademe.
Realism hurts. Sometimes.
It may the greatest event ever to happen to NZ. It is an event however, and will not sustain long term economic hope. Particularly when you consider that just 80,000 people are supposed to support 1.5bn of "revenue" (which is 2.7%) of annual GDP (assuming all tourists spend to plan).
Pack n Save have a special on coffee
Oh Dear ! Trademe- how will you cope when its over or dare I say it, suffer defeat!
Another copy and paste Emission Tax 'scam' post from Simon M. Yawn.
As long as the new 'recession' pulls the GBP FX rate back by 20-30% I don't really care. Let the country burn! Mwahahahaaaaaa
Good on you Simon, keep the posts coming re the emissions scam. Palmerston North is to be sacrificed for this wretched attack on the economy, commonsense and property rights.
www.palmerston-north.info
what the reserve bank needs to do is to abandon it's low interest rate policy.
it should act to increase,yes increase, interest rates
only then will we start to build savings and thus investment capital,enabling growth to start
and the sooner the better!
When milk hits $ 7.80 (late 2011), some of the comments, of some flippancy, towards the taxation shift; via the Emissions Scam, what it does, how it works and how it infects, may weaken in their flagrant disregard and or ignorant ambivalence towards how such a shift implicates New Zealand. When folk call for unification, economic and social order, joint economies... I.e. it is likely that the ills of an ugly mutation of a mixed economy will occur. Do the research Bob (if you are able)
World cup benefit ! I R B 50 N Z 0 As for the recession the game hasn't started yet,we are still playing the national anthem.
Solutions to Fix New Zealand.
• Sell South Island to an European country or America.
• Let Australia take over our health care with a shared agreement. We pay tax directly to Australia but our hospitals gain same quality, doctors and pay and ran as if they where part of Australia as a state.
Including letting Australia pay for our primary health care and we pay them tax for this. Also allows one drugs company and authorization and allow New Zealanders free health care in Australia.
• Reduce Resource Management Act to a small slim document about basic care for environment.
• Privatize many of the Government organizations.
-Phone, TV, Communications, ACC, Building Permits, Roads,
• Reduce g.s.t. of food, schools and basic needs.
• Increase quality education
1.) Increase the school hours.
2.) Introduce College for 16- 21 year olds for specific skills
3.) Remove Intermediate Schools.
• Increase tax on Alcohol, and ban Alcohol Advertising
• Have an agreement with USA for allowing TV channels here.
• Mine more, copper, Iron etc.
• Increase support for alternative transport methods rather than gas cars.
( rapid rail, Invest in a small Electric car manufactures here.)
• Reduce a lot of Bureaucracy.
• Reduce wages for all public sector jobs, except Doctors and Medical roles.
• Put capital gains tax on housing sales.
• Destroy my radio and put on some clever English radio I can listen to.
• Remove governments powers in some areas, put many things to referendum and restrict their ability to spend on unplanned services
• Criminalize Prostitution, firstly adopting the Swedish model in this regard.
• Build and legislate a constitution, keeping some items out of political whim to ensure protection of democracy in New Zealand.
• Allow and ask a lot more people to come from overseas.
• Quadruple the amount of refugees we can accept and have nice support program to help them into New Zealand
• Ask UN to help with some areas of Human abuse and Child Abuse and care.
Ask UN for help in Aid in this area.
• Allow other countries to send any refugees here they need,
(charging for this service, I think if Australia does not want illegal refugees into there county they can setup and fund a base here for them. As long as they posed not danger to our lifes; )
• Allow reserve Bank to print credit. Increase money now by funding local councils and generate about $2,000,000,000 in credit.
• Allow houses to be build higher around Auckland. Such as 5 story.
• If you can follow this also can explain a bit later. : ) reduce our compliance standards i.e. allow people to build their own boats, sheds and fences.
im so sad:(
im so sad:(
sorry for people that have died in this case of matter rip :(
I agree take the G.S.T off fruit and vegetables they are getting so expensive. If people want to smoke and drink make them pay more. Don't make us pay more for choosing to eat healty food. We wont cost the goverment as much when we get old.
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