Aus and NZ - economic data and event previews

Australia and New Zealand - economic data and event previews

NZ trade balance (NZD, mn.) - The trade balance should widen to NZ$600mn in April, mainly owing to fewer imports. Domestic demand remains sluggish, and imports of consumption goods, in particular, should be very weak.

RBNZ two year inflation expectations (2Q, %) - Inflation expectations probably fell again in 2Q. In the March quarter, the survey showed that inflation is expected at 2.3% in two years’ time. With our forecast calling for six straight quarters of negative growth, we expect that inflation will moderate significantly, falling back within the RBNZ’s 1-3% target as soon as 2Q.

NBNZ business confidence (Index, May) - The NBNZ business confidence survey should fall to -20 after jumping in April to - 14.5 from -39.3. The more important reading of firms’ own activity expectations also should deteriorate, falling from -3.8 in April, reaffirming our view that growth will contract again in 2Q.

NZ Budget - The government in December forecast the fiscal position to weaken significantly in the years ahead. We forecast a deficit of 1.0% of GDP in the year to June 2010. In the years thereafter, however, this fiscal position will worsen significantly, with our forecast calling for the deficit to expand to 3.9% of GDP by June 2011.

Aus-NZ Data Previews 25May09 (pdf)

ENDS

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