Tony Alexander

Economic Commentaries

Weekly Overview – March 20

Thursday March 20th 2014

This week we note how the recent surge in NZ productivity growth is just a catch-up following the rout of 2008-09 rather than evidence of a new permanently higher growth path for the NZ economy. This is important because it means inflation risks will potentially easily build as growth accelerates this year which is why further interest rate rises loom and the NZ dollar will remain well supported though with some capping from easing dairy prices and continued tapering of US money printing.

If you are in your twenties and bought a house with a large mortgage at a 1960s level interest rate in the past five years then we devote three pages to educating you about what you are about to be struck with and why.