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NZ Weekly Economic Insights
Chief Economist Dominick Stephens presents economic insights in this bite-sized weekly video.
We have been talking about a November housing market slowdown for some time. The data is starting to show that the November slowdown is a reality.
It turns out New Zealanders are better off and have been saving more than previously realised.
Exporters are doing very well... but of course, that means the exchange rate and interest rates will be higher.
There are straws in the wind supporting our view that the housing market will start to slow from November.
The latest health check on the labour market showed unemployment is falling and employment is up, but there is hardly any wage growth.
The RBNZ has reminded us that the timing of any OCR hiking cycle depends on the exchange rate. As it happens, we think the exchange rate will remain high, so the RBNZ won't hike the OCR until April 2014.
Currency strength will keep the Reserve Bank on hold for a while longer, even with the improving state of the economy. But once the OCR does starts to rise, the question of how far it will need to go is not a straightforward one.
This week Westpac released long-run economic forecasts out to 2023. The key idea is that economic growth will probably be slower in the future than we were used to in the past.
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