05 Jun What’s the economy doing?
No two ways about it, NZ has had a bit of a tough time going through the various alert levels. Our collective productivity has taken a bit of a hammering. There has been a lot more optimism since the move to level 2, and there has been a rebound in spending. But how long will it last? According to Liz Kendall, senior economist at ANZ, not that long. She thinks we are mainly churning through a bit of pent up demand and she has the data to back it up. You can read more about it here: https://www.interest.co.nz/business/105267/economists-countrys-biggest-bank-say-based-their-banks-card-data-spending-has
New Zealand is such a small economy, it is highly reliant upon other economies around the world. And unfortunately, a lot of them aren’t doing so flash. According to CNN, https://edition.cnn.com/2020/05/28/economy/unemployment-benefits-coronavirus/index.html 1 in 4 workers in the USA has filed for unemployment benefits. Over 40 million. That is a substantial proportion of their economy and it would be naive to think that we won’t be affected when the world’s largest economy stumbles.
So our advice is simple: now, more than ever, it is important to retain control over your spending. While it looks like the downturn might not be as bad as first forecast, we know the economy is going to slow, we’re just not sure by how much. So plan for the best but prepare for the worst.
