New Zealand, perhaps more famously known as Middle Earth from the Lord of the Rings and Hobbit films, is famous for its untouched scenic vistas, the pristine, rolling landscapes, green hills, glaciers, volcanoes, and beautiful beaches. But all of this is now at risk as the country rushes to develop its hydrocarbon resources. As the […]
The Micronesian island of Nauru is prominent in Australian consciousness. As part of the Pacific Solution, Australia pays Nauru to “process” refugees pending determination of their immigration status. But Australia’s economic future may also parallel that of Nauru. In the 1960s and 1970s, Nauru boasted the highest per capita income in the world. Its wealth was […]
I recently “debated” twice with senior Chinese officials on the future prospects for China. In both cases they made the argument that Chinese growth rates were going to rise in the next few years and that the current deep pessimism is unwarranted. I argued, of course, that growth would slow even more. Neither of the […]
The Reserve Bank of Australia delivered a 25 bp rate cut earlier today. While the ECB, BOE and BOJ meet later this week, expectations are low for additional action. Sweden’s Riksbank meets on October 25 and could be the next central bank to cut rates. The Riksbank cut the repo rate 25 bp in early […]
There are several providers of statistics on Australian house prices, but only one that doesn’t have a vested interest in the direction house prices actually move in: the Australian Bureau of Statistics. So despite the criticisms of this series—that it’s based on detached dwellings only, based on median sales data, too infrequent, not adjusted for […]
Here is Part I. A Fork in the Economic Road … The commodity boom has created a “two track” economy. The mining and commodity boom benefits a small part of the economy whilst simultaneously creating problems for other parts. The mining and energy sector account for less than 10% of the Australian economy. This is […]
Australia has been one of the world’s best performing economy. But its success in avoiding the worst of the global economic problems may not continue. Australia’s future is inextricably linked to China and the commodity “super boom”. Australia economic prospects remain vulnerable to international developments outside its control. Escaping Acronyms… The popular narrative is that Australia […]
The Bloomberg Correlation-Weighted Index shows that the NZD has appreciated by 3.56% over the past year, sustained by New Zealand’s economy outperforming many other advanced economies. The rising currency is providing benefits to some sectors to the economy, while posing challenges to other sectors. The high NZD is having the most effect pushing agricultural commodity […]
A few weeks ago, the Economist put out its quarterly gauge of house price values. Australia just beat out Hong Kong as the most overpriced market in the developed world, with an overvaluation of 56%. Japan was by far the most undervalued market, with an undervaluation of 35%. The only other housing markets that were undervalued according to the Economist were Germany (12%) and the U.S. (7%). (This was well before the earthquake and tsunami in Japan so it is hard to say what impact those events will have on house prices).
Asia’s leadership of the global economic recovery is continuing unabated. And, even though heightened risks mean there may be tough times ahead again, the region is well equipped to handle them.
Asia’s remarkably fast recovery from the global financial crisis continued in the first half of 2010, despite the recent tensions in global financial markets. In fact, GDP growth in the first quarter was generally stronger than we anticipated in our Regional Economic Outlook in April. And high-frequency indicators suggest that Asian economic activity remained brisk in the second quarter. Even more notable, this is true both for economies that escaped a recession in 2009, thanks to their relatively larger domestic demand bases (China, Indonesia, and India), and for the more export-oriented economies such as Japan, the Newly Industrialized Economies (NIEs), and the rest of the ASEAN.
Two growth engines