"Recession? Not this year"
I read an article by Peter Nichol recently. Interesting to say the least. It is entitled "Recession? Not this year."
Heres the essence, of it;
· There's been a significant drop in energy prices.
E.g. Oil prices in July 2022 were around US$120 a barrel. It’s been trending down, currently around US $80 a barrel
· Container prices falling.
They skyrocketed in 2019 and peaked at around US $10,400. They're currently at around US $2,400
· The return of overseas tourists to NZ has exceeded expectations
· The US share market has risen almost 10% since its trough in October 2022, despite rising interest rates. This doesn’t happen when market participants expect a recession
· US inflation.
In the year to Dec 2022 it was 6.5%. While this is still well above the Feds target of 2%, it’s the lowest annual rate of inflation in the US for over a year. Fed spokespeople have already made statements saying that their next rises in interest rates will now be lower than previously forecast and the peak level of their policy interest rates will be lower too.
This latest picture from the US Fed should be good news for most other countries including NZ.
By reading just the above, it’s a little out of context. He provides much more information, background. See this link for the full article
Peter Nicholl joined the Reserve Bank of NZ where he worked for 22 years. He was chief economist for five years and deputy governor and deputy chief executive from 1990 to 1995.
In 1995, he became an executive director on the World Bank board representing NZ Australia, Korea, Cambodia, Mongolia and seven Pacific Island nations
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