RaboResearch - Economic Research

Special

New Zealand: Two sides of the same coin

The economic effect of Omicron will be contained in Q1 before growth accelerates from Q2 onwards. However, higher prices and lower global growth, fuelled by the war in Ukraine, drag on economic growth in the second half of 2022. As such, the recovery is likely to be not as strong as it looks at face value.

Special

Asia: Emerging Market Vulnerability Heatmap

Developing economies are more vulnerable to new virus strains due to lower vaccination coverage, slower pace of vaccination and the nature of their vaccines. Global economic recovery and rising interest rates by major central banks increase pressure on domestic policymakers and country balance sheets.

Special

Australia: Weighing the Work

On the one hand, we expect high labour demand and labour market scarcity to increase the likelihood of wage growth. On the other hand, this upside potential is being eroded by an increased supply of labour from overseas, international competition, and structural shifts. As such, we believe it will take some time before “significant” wage growth will occur.

Special

Australia: Economic update

The Australian economy is set to contract in Q3, modestly rebounding in Q4. Inflation risk are likely, as gas and freight prices rise steeply. Australia must balance existing economic ties to China with increasing geostrategic ties to the west.

Economic Update

India’s economy gets back on track

Growth of 20.1% in India in Q2 is misleading, as economic output was disrupted by a second Covid-19 outbreak. Going forward, we expect an economic recovery as restrictions ease and mobility increases, fostering consumption and investments.

Economic Update

Australia: From frontrunner to laggard

The transmission of the delta variant and low vaccination rates in Australia, have turned Australia from a frontrunner into a laggard. We have revised our economic forecast for 2021 downwards, as a result of the economic spillover effects of the current wave of, and projected, infections in Q3 and Q4.

Economic Report

Delta variant forces Australia into new lockdowns

Australia is facing new lockdowns due to the spread of the Delta variant. Nonetheless, we expect the economic impact to be less severe than last year. Inflation reached a high point of 3.8%. However, the central sees this as temporary and the RBA doesn’t expect to hike rates before 2024.

Economic Report

Economy of India recovers from second wave of Covid-19

India’s economy rebounds quickly and economic pain of the second wave will be concentrated in the second quarter. Inflation number were above inflation target of the RBI in May and June but seem to have peaked. We expect the RBI to remain its accommodative stance for some time to come.

Special

Emerging Market Vulnerability Heatmap

Strong economic recovery by advanced economies is leading to increasing inflation expectations. Tighter monetary policy in advanced economies potentially threatens emerging market economic recovery. Our vulnerability Heatmap provides a comprehensive overview of important economic indicators to signal potential vulnerabilities in 18 economies.

Economic Report

Australia: Policymakers shifting gears

The recent Australian federal budget represents a shift in budget strategy away from budget prudence towards higher spending. The combination of loose fiscal and monetary stimulus increases inflation expectations. However, the RBA doesn’t expect a rate hike before 2024 due to spare capacity in the economy.

Special

Second wave of Covid-19 impacts economic recovery in India

The number of new infections in India will bottom out in May. Economic pain will come through decreased private consumption after mobility levels dropped. RBI continues its accommodative policy but relatively high debt levels limit the government’s flexibility to support the economy.

Economic Report

Travel bubble brings Australia out of isolation

The establishment of a travel bubble between New Zealand and Australia has more symbolic than economic value. Even though the Australian labour market has shown a strong performance over the last months, the end of the JobKeeper program is hanging above the labour market like the sword of Damocles.

Special

Comparing G20’s cash cannon in 2020

Advanced G20 countries have really fired up the cash cannon compared to emerging G20 economies during Covid-19. But without this sizeable government spending by both the advanced and the emerging G20 countries, G20’s total contraction could have been four times more severe.

Economic Report

India: Second wave and vacci”notion”

India showed 0.4% GDP growth in Q3 of FY21. Unfortunately a second wave of Covid cases is on the rise, which might hamper growth in the next months. Although vaccine implementation started mid-January, the pace of vaccination must accelerate if India is to reap economic benefits in 2021. Fortunately, availability of vaccines is not a constraint.