New Zealand

New Zealand

Postby winston » Sun May 25, 2008 6:28 pm

From kennynah with thanks:-

New Zealand March Commodity Prices Increase 2.% To Record High

4/2/2008 10:57:37 PM Price levels for New Zealand's primary commodities increased 2.0 percent to a record high in March, according to data released Thursday by the Australia and New Zealand Bank.

The ANZ's Commodity Price Index showed price increases for seven of the component commodities, unchanged prices in three components and lower prices in three others.

Venison prices led the increase, posting a 10.1 percent increase for the month, led by stronger demand from Germany. Seafood prices increased 7.7 percent, aluminum prices increased 7.4 percent and beef prices rose 4.0 percent. Minor increases were recorded for logs, dairy goods and wool.

Prices for animal skins declined 1.6 percent, the third successive monthly decline.

On an annual basis, skin prices increased 61 percent while dairy prices were up 46 percent on year. Apples were the only commodity showing a decrease from a year ago, posting a decline of 20 percent
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Re: NZ - Market News & Stocks

Postby kennynah » Sun May 25, 2008 6:32 pm

Prices for animal skins declined 1.6 percent, the third successive monthly decline.


animal skins???what animals skins? wah liao....this country is one of those putting up Tiger skins for sale ah??
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Re: New Zealand

Postby winston » Thu Jun 05, 2008 11:51 am

New Zealand, Facing a Recession, Must Wait for Rate Reductions
By Tracy Withers

June 4 (Bloomberg) -- New Zealand central bank Governor Alan Bollard may be pushing the economy into a recession by keeping interest rates at a record to fight inflation, ignoring factory closures and slumping consumer spending.

The Reserve Bank will keep the official cash rate at 8.25 percent tomorrow in Wellington, according to all 15 economists surveyed by Bloomberg. Ten say Bollard will lower the rate by September amid mounting evidence inflation will slow.

New Zealand's economy probably shrank in the first quarter as high borrowing costs reduced spending and stalled the housing market, the Treasury Department said May 22. Tax cuts and record- high dairy prices are failing to boost confidence among consumers and businesses, leaving Bollard under fire for keeping rates too high for too long.

``He should cut rates, but he won't,'' Alasdair Thompson, chief executive of the Auckland division of the Employers & Manufacturers Association, said in an interview. ``He is trying to fight inflation that can't be controlled by causing deflation somewhere else. That sort of medicine often kills the patient.''

The Reserve Bank declined to comment on the criticism, said Anthea Black, a spokeswoman in Wellington.

Consumer prices rose 3.4 percent in the year ended March 31, and annual inflation is forecast to stay above the central bank's 1 percent to 3 percent target range until mid-2009, Bollard said in March.

Spending, Jobs

Last week, two forecasters said New Zealand is in a recession, citing a slump in domestic demand and confidence. First-quarter retail spending fell 1.2 percent, the biggest drop in 11 years, and employment declined the most since 1989.

ANZ National Bank Ltd., the nation's biggest lender, said the economy contracted 0.3 percent in the first two quarters of 2008. An ANZ National index of business confidence fell to a 17-year low in February and was little changed in April.

First NZ Capital Group also said the economy shrank in the first two quarters, citing ``deeply depressed'' consumer confidence and a slump in the housing market. The government will publish the first-quarter gross domestic product report on June 27 in Wellington.

``In an environment where retail sales growth has been negative for more than a year and the housing market is going through a significant contraction, the question is does a higher- interest-rate environment seem appropriate?'' said Jason Wong, an economist at First NZ in Wellington.

Waning Confidence

Consumer confidence is the lowest on record, and house sales fell to a 16-year low in April.

Slowing sales are eroding earnings at retailers such as Briscoe Group Ltd., which says profit from its sporting goods and home-ware stores may drop more than 50 percent in the six months ending July 27.

``Tight credit conditions, falling house prices and the rising cost of living are hitting customers where it hurts,'' Managing Director Rod Duke said on May 23. ``The slowdown will be protracted.''

Companies are closing factories and eliminating positions. Dunedin-based PPCS Ltd., the nation's biggest meat processor, said last month it will shut two abattoirs and fire 604 workers. Fisher & Paykel Appliances Ltd. said in April it was closing a dishwasher and oven manufacturing plant, with the loss of 430 jobs.

Bollard, 56, was appointed to a second five-year term in May 2007. A graduate of the University of Auckland, he served as the top bureaucrat at the New Zealand Treasury before joining the central bank in 2002.

Focus on Inflation

He's kept interest rates unchanged since July, waiting for evidence slower growth will curb inflation. By contrast, central bankers from Beijing to Bangkok face the prospect of having to raise rates after losing bets that a global slowdown would contain prices.

In China, Thailand, the Philippines and at least eight other Asian economies, benchmark borrowing costs are lower than the inflation rate, resulting in negative real interest rates, according to data compiled by Bloomberg News.

Bollard's refusal to reduce interest rates in the face of a looming recession is in contrast to Federal Reserve Chairman Ben S. Bernanke, who has cut the U.S. benchmark seven times since September to 2 percent. The U.K. and Canada have also reduced borrowing costs this year.

The prospects of an interest-rate reduction as early as this week were diminished when Finance Minister Michael Cullen announced NZ$10.6 billion ($8.3 billion) of income-tax cuts in his May 22 budget. The cuts, to be phased in over four years from October, were larger than economists expected.

As well, Fonterra Cooperative Group Ltd., the world's biggest dairy exporter, last week raised its forecast payment to farmers who supply it with milk.

Inflation is being fanned by rising fuel and food prices. Gasoline has jumped 28 percent the past year to a record NZ$1.97 a liter ($5.81 a gallon). Groceries have risen 11 percent.

``Bollard's priority is inflation,'' said Nick Tuffley, chief economist at ASB Bank Ltd. in Auckland. ``In the short term, inflation will exceed 4 percent.''
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Re: New Zealand

Postby winston » Wed Jun 11, 2008 8:42 am

New Zealand House Sales Drop to 16-Year Low, Prices Decline
By Tracy Withers

June 11 (Bloomberg) -- Sales of New Zealand houses slumped to a 16-year low in May as record-high interest rates curtailed demand for property.

The number of homes sold dropped 52.9 percent to 4,373 last month from 9,285 a year earlier, according to a report from the Real Estate Institute of New Zealand Inc. e-mailed to Bloomberg News today. Sales were at the lowest level since December 1991.

A cooling real estate market supports Reserve Bank Governor Alan Bollard's view that house prices will fall the next three years as economic growth slows. Bollard said last week he's likely to cut interest rates later this year as moderating domestic demand helps ease inflation pressures.

``It may well be that sales settle at this level until the Reserve Bank takes the pressure off interest rates,'' Murray Cleland, the institute's national president said in a statement.

The median house price fell 1.4 percent from a year earlier to NZ$345,000 ($259,700). Prices were unchanged from April.

The median time it took to sell a house increased to 49 days, the second longest time on record, from 44 days in April. Days-to-sell reached 50 in February.

Bollard kept New Zealand's benchmark interest rate at 8.25 percent on June 5. Recent reports showed retail sales and the number of people employed declined in the first quarter.
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Re: New Zealand

Postby LenaHuat » Fri Jun 27, 2008 1:51 pm

From the Sydney Herald :
New Zealand on brink of recession
June 27, 2008 - 11:02AM
Page 1 of 2
New Zealand's economy contracted in the first quarter, putting the nation on the brink of a recession as soaring credit costs damp domestic demand and a drought crimps exports.

Gross domestic product fell 0.3% from the fourth quarter, when it gained a revised 0.8%, Statistics New Zealand said in Wellington today. That matched the median estimate of 13 economists surveyed by Bloomberg News. The economy expanded 1.9% from a year earlier.

Seven economists expect the economy also shrank in the second quarter, pushing New Zealand into its first recession since 1998. The first contraction in two years adds to signs Reserve Bank Governor Alan Bollard will cut the benchmark interest rate from a record-high 8.25% within the next three months.

''This isn't just a pause, it's the start of a long process of economic correction,'' Craig Ebert, senior markets economist at Bank of New Zealand, said before the report was released. ''Growth, or the lack of it, will start to dominate the Reserve Bank's thinking.''

New Zealand's dollar fell to 75.37 US cents from 75.52 cents immediately before the report.
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Re: New Zealand

Postby iam802 » Tue Jul 15, 2008 11:46 am

New Zealand Inflation Accelerates to 18-Year-High

http://www.bloomberg.com/apps/news?pid= ... efer=home#

-----

July 15 (Bloomberg) -- New Zealand's consumer prices rose at the fastest pace in 18 years in the second quarter, fanned by fuel and food costs, adding to signs the economy is facing stagflation as it slips into recession.

The consumer prices index rose 1.6 percent from the first quarter, Statistics New Zealand said in Wellington today. The median estimate of 12 economists surveyed by Bloomberg was for 1.4 percent. From a year earlier, prices rose 4 percent.

Central banks from Chile to South Korea are grappling with slowing economic growth while surging fuel and food prices fan inflation. Reserve Bank Governor Alan Bollard said last month he couldn't rule out the possibility of a recession as rising prices, record-high interest rates, a drought and a slumping housing market stall New Zealand's $104 billion economy.

``It's certainly stagflation in the sense that the economy isn't growing and it's got an inflation problem,'' said Matthew Johnson, an economist at ICAP Australia Ltd. in Sydney. ``It's a tough situation for the central bank to be in.

``If they cut in the face of accelerating inflation, they are risking a policy error, which could be very expensive in the long run.''

The chance of a quarter-point rate cut at the next review on July 24 fell to 50 percent at 3 p.m. in Wellington from 58 percent before the report, according to an index calculated by Credit Suisse based on swaps trading. New Zealand's dollar bought 76.56 U.S. cents from 76.40 cents before the report.

Recession Risk

Bollard said on June 5 that slowing growth will return inflation below the 3 percent limit of his target range by mid- 2010 and it is likely he will cut the benchmark interest rate from 8.25 percent this year.

Three of 13 economists surveyed by Bloomberg expect a rate reduction on July 24. Ten expect a cut in September.

The economy contracted 0.3 percent in the first quarter. Eight of 13 economists surveyed by Bloomberg say it also shrank in the second quarter, putting the economy in its first recession since 1998.

A net 23 percent of companies say sales will slow in the next three months, the most pessimistic outlook since 1990, suggesting the economy will also contract in the third quarter, according to a July 8 report from the New Zealand Institute of Economic Research.

Global Problem

In South Korea, where prices rose 5.5 percent in June from a year earlier, the government is working on a series of price controls designed to cool the fastest inflation in a decade, Vice Finance Minister Kim Dong Soo said today.

In Chile, consumer prices rose 9.5 percent in June from a year earlier, the fastest pace in more than 13 years, and the central bank has tripled interest rates the past year.

Bollard expects annual inflation will accelerate to 4.7 percent in the year ending September, the highest since 1990, as fuel and food costs rise.

He is under pressure from companies and home-owners to cut interest rates as drought, international credit turmoil and a slump in the housing market weigh on consumer spending.

Hallenstein Glasson Holdings Ltd. said last week that full- year profit will fall at least 28 percent as sales drop, the third retailer to cut earnings forecasts in the past two weeks.

Retail spending in May had the biggest slump in four years, Statistics New Zealand said yesterday. House sales fell for a fourth month in June, dropping to a 16-year low.

Core Inflation

Bollard's primary focus is on non-tradable inflation, a core measure of prices that are not influenced by currency fluctuations and fuel, say economists.

Non-tradable prices rose 0.9 percent from the first quarter when they increased 1.1 percent. The result matched economists' forecasts. Prices gained 3.4 percent from a year earlier, the slowest annual pace since early 2003.

Fuel and food prices, plus the cost of owning a home, made the biggest contributions to second-quarter inflation.

Gasoline prices rose 13 percent in the quarter and 26 percent from a year earlier. Excluding gasoline, consumer prices gained 1 percent in the quarter and 2.7 percent over the year, the agency said. Diesel prices jumped 29 percent.

Fanned by jet fuel costs, domestic airfares rose 3.9 percent and international fares also increased.

Food prices rose 2.2 percent led by bread, snack foods, fish and vegetables.

A 3.6 percent increase in electricity prices led to an increase in the cost of owning a home. Rentals rose 0.7 percent. The cost of buying and building a new house gained 1.1 percent.

The price of new cars, computers and overseas holidays declined as a rising currency curbed the cost of imports.

Air New Zealand Ltd., the nation's biggest airline, raised fares by an average 10 percent between March and June, citing record-high jet fuel prices.

Electricity prices have increased as a drought depleted the levels of lakes and rivers that account for 60 percent of the nation's generation.

To contact the reporter on this story: Tracy Withers in Wellington at [email protected].
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Re: New Zealand

Postby iam802 » Thu Jul 24, 2008 1:00 pm

Bollard Cuts N.Z.'s Key Rate, Signals More Reductions (Update1)

http://www.bloomberg.com/apps/news?pid= ... efer=home#

------------------

July 24 (Bloomberg) -- New Zealand's central bank cut its benchmark interest rate by a quarter point to 8 percent, the first reduction in five years, saying slowing economic growth will curb inflation.

The nation's currency fell and stocks rose after Reserve Bank Governor Alan Bollard said he may cut rates further. ``Economic activity is likely to remain weak over the remainder of 2008,'' he said in a statement in Wellington today.

New Zealand's economy contracted in the first quarter, putting the nation on the brink of its first recession since 1998 as drought, a slumping housing market and rising credit costs stall spending. Bollard says inflation will peak at 5 percent this year before returning to below the 3 percent limit of his target range by 2010.

``The economy is broken. The construction industry has turned turtle, the housing market is going backwards and equity markets have fallen,'' said Matthew Johnson, a senior economist at ICAP Australia Ltd. in Sydney. ``It's all pretty ugly.

``Admittedly inflation is high, but rates at 8 percent are still very tight,'' Johnson said, adding that he forecasts another 50 basis points of cuts by the end of this year.

New Zealand's dollar fell to a six-month low of 74.20 U.S. cents at 3:05 p.m. in Wellington from 75.02 cents immediately before the statement. Against the Australian dollar, the currency fell to a seven-year low.

Stocks Rise

The yield on a three-year benchmark bond fell 6 basis points to 6.17 percent. A basis point is 0.01 percentage point. New Zealand's benchmark NZX 50 stock index rose 1.8 percent to 3,260.34. Before today, the index had fallen 26 percent the past year amid expectations the slowing economy would curb profits.

Slowing spending is eroding sales at retailers such as Smiths City Group, which last month said revenue at its appliance stores fell 7.2 percent in the year ended April 30.

Bollard's decision will be a boost to retailing and the economy in the next six-to-12 months rather than immediately, Smiths City Chairman Craig Boyce said in an interview from Christchurch today.

``Retailing is a lot about confidence, and if this is seen as a first step toward significant rate cuts, that will help lift the gloom that's out there,'' he said. ``It's very positive, though not exactly bold.''

Unexpected Decision

Bollard had kept the official cash rate at 8.25 percent, the highest of any nation with an Aaa credit rating, since July last year. Today's is the first rate cut since July 2003.

Just four of 15 economists surveyed by Bloomberg News last week predicted today's decision. Eleven expected no change until the next review on Sept. 11.

``Provided that the outlook for inflation continues to improve and there is no excessive exchange-rate depreciation, we would expect to lower rates further,'' he said today.

Inflation will peak at 5 percent in the year ending Sept. 30, the highest rate since the fourth quarter of 1990, Bollard said today. Consumer prices rose 4 percent in the year ended June 30, the fastest annual pace in two years.

While official rates have been unchanged the past year, local banks have been raising borrowing costs as they have had to pay more for credit overseas.

Today's rate cut ``will help to mitigate the effect of these increases on the actual borrowing costs paid by firms and households,'' Bollard said.

Global Dilemma

Central bankers around the world are grappling with slowing economic growth while surging fuel and food prices fan inflation. Consumer prices in the U.S. surged 5 percent in the year through June, the biggest jump since 1991, and in Europe they climbed 4 percent, the fastest pace in more than 16 years.

Bollard was under pressure to cut interest rates to help New Zealand avoid a prolonged recession.

``More unpleasant international news has emerged since the June statement and there is a risk that the domestic economy will slow further,'' Bollard said today. ``The ongoing correction in the housing market together with very high oil prices will limit household spending and constrain the extent of recovery.''

Gross domestic product contracted 0.3 percent in the first quarter. Eight of 13 economists surveyed by Bloomberg expect it also shrank in the three months ended June 30.

Sales of houses slumped for a fourth straight month in June and prices fell, the Real Estate Institute said on July 11. Consumer confidence fell to a record low in the two weeks ended June 29 because of the threat of recession, according to a survey by research firm Roy Morgan.

New Zealand's biggest trade union said last week companies will face demands for higher wages as food and fuel prices soar.

``The weaker economy is expected to reduce pressure on resources, making it more difficult for firms to pass on costs and for higher wage claims to be agreed.''

The jobless rate was 3.6 percent in the first quarter, the sixth-lowest of 27 economies in the Organization for Economic Cooperation and Development that use standardized rates.
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Re: New Zealand

Postby winston » Fri Sep 26, 2008 3:43 pm

NZ in recession in first half of year

New Zealand fell into its first recession for a decade during the first half of this year as the global credit crunch took hold, official figures showed.

Tight credit conditions and rising food and fuel prices cramped household spending, while drought cut production in key agricultural industries, Statistics New Zealand said.

New Zealand's gross domestic product shrank 0.2 percent in the three months to June, following a 0.3 contraction in the March quarter, the government agency said.

Economists commonly define two straight quarters of economic decline as a recession.

New Zealand was last in recession in the second half of 1997 and early 1998 amid the Asian financial crisis.

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Re: New Zealand

Postby iam802 » Mon Oct 06, 2008 6:33 pm

Seems to be , it's pretty serious for NZ

-----

Cullen: 'The rainy day has now arrived'

http://www.stuff.co.nz/stuff/4717689a13.html


The risks of a more severe economic downturn have increased, Treasury has warned after revealing rising levels of government debt and cash deficits over the next decade.

In issuing its pre-election fiscal update, Treasury said its forecasts were finalised in late August, when it made some allowance for the likelihood of weaker world growth, but before the recent turmoil in world financial markets.

And while it still expected the New Zealand economy to evolve broadly in line with earlier forecasts "considerable uncertainty exists around this outlook, with the risks increasingly moving to the downside."

Speaking at the release of the Treasury update, Finance Minister Michael Cullen said the scale of international turmoil was unprecedented.

"What we thought we knew even five months ago has been overtaken by events," Dr Cullen said.

"The rainy day has now arrived."

Key figures from the fiscal update include:

• Gross government debt to rise from 17.4 per cent of GDP to 24.3 per cent by 2013 against the Government's target of 20 per cent of GDP on average.

• Growth expected to be only 0.1 per cent by March 2009 before lifting to 1.8 per cent and then 3.3 per cent in the following two years.

• The budget deficit (OBEGAL) forecast to be $64 million next year rising to $1.7 billion by 2010 and staying in deficit for 10 years.

• A cash surplus of $2 billion in the year to June falling to a projected cash deficit of $5.9 billion in 2008/2009 and further deficits over the next four years rising to $7.3 billion by 2012. In the May budget cash deficits were forced to average $3.5 billion.

• Dollar to decline in value by 22.7 percent by 2013.

• 90-day interest rates falling from 8.8 per cent to 6.3 per cent by 2013

• $496 million is all that is left in next year's budget for new spending promises

• Unemployment tipped to rise above 5 per cent by 2010

• Inflation forecast to rise to 4.5 per cent by March 2009 before falling back to just under 2.5 per cent.

• Tax revenue for the next three years to be lower on average by around $900 million.

• The government reported a surplus for the year to June 2008 (OBEGAL) of $5.6 billion.

Treasury said the outlook was weaker to that forecast in the May budget for a number of reasons.

These included that the domestic slow-down had been sharper than expected, with declines in consumption and a more rapid fall in residential investment.

Households and businesses had come under increasing cost pressures, meanwhile, including higher electricity, interest rate, fuel and food prices, which had dampened private consumption and business profitability.

"It will take time for these pressures to dissipate, though some relief in terms of oil prices and interest rates has emerged since the finalisation of our economic forecasts," Treasury said

But the housing market had also weakened more quickly than expected and was expected to remain depressed over the next year as a result of high effective interest rates, low net migration falls and falling consumer confidence, which would affect private consumption and residential investment.

Meanwhile, international financial turmoil had deepened and was having an adverse impact on global economic growth.

"New Zealand is expected to feel the effects of the financial crisis principally through the tighter availability and increased costs of credit, but also through a fall in business and consumer confidence, falling asset values and lower demand and prices for our exports."

The main reason for the weaker fiscal position compared to budget forecasts was the weaker economic outlook, leading to lower tax revenue and higher spending. The largest single change in spending was an increase in the expected costs of benefits - $500 million more than previously forecast. That reflected both an increase in the number of beneficiaries and the impact of higher inflation on the costs of indexing benefits.

Some government policies were also costing more than forecast - including $200 million more a year on early childhood education, following higher than expected take-up of the 20 hours free policy.

KiwiSaver costs were also $280 million above forecasts.

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Re: New Zealand

Postby kennynah » Tue Oct 07, 2008 2:57 am

long article...
my impression of NZ....sheeps and more sheeps...that's all it will ever amount to... sheeps and sheeps' fur
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