Robertson now expected to be Labour leader by Xmas

NEW ZEALAND WEEKLY ECONOMIC & POLITICAL UPDATE

Thursday 2 October 2014

www.ipredict.co.nz

www.electionresults.co.nz

GRANT ROBERTSON IN POLE POSITION TO BECOME LABOUR LEADER BEFORE XMAS

Grant Robertson is now overwhelmingly picked to become the next leader of the Labour Party by the end of the year, according to the combined wisdom of the 8000+ registered traders on New Zealand’s predictions market, iPredict. Another potential Labour leadership contender, Andrew Little, is not expected to remain in parliament once special votes are counted, with National now picked to gain one more list seat at Labour’s expense. While inflationary expectations are broadly steady, interest-rate expectations have eased. The probability of New Zealand being elected to the UN Security Council has also fallen over the last week.

Politics:

• Forecast party vote shares after special votes are counted (major and minor parties, adjusted to sum to 100%):

o National: 48.2% (up from 48.1% on election night)

o Labour: 24.6% (down from 24.7%)

o Green: 10.3% (up from 10.0%)

o NZ First: 8.9% (as election night)

o Conservatives: 4.2% (up from 4.1%)

o Internet-Mana: 1.2% (down from from 1.3%)

o Maori Party: 1.2% (down from 1.3%)

o ACT: 0.7% (as election night)

o UnitedFuture: 0.2% (as election night)

• No electorate seats are in doubt

• Parliament is expected to be:

o National: 62 seats (up from 61 on election night)

o Labour: 31 seats (down from 32 on election night)

o Green: 13 seats (as election night)

o NZ First: 11 seats (as election night)

o Maori Party: 2 seats (as election night)

o ACT: 1 seat (as election night)

o UnitedFuture: 1 seat (as election night)

• There is a 79% probability David Cunliffe will depart permanently as Labour leader by the end of year (up from 50% last week) and a 92% probability he will depart by the end of 2015 (up from 83%)

• Grant Robertson is favoured to become the next leader of the Labour Party (77% probability, up from 47% last week), followed by “other who WAS an MP on 30 September 2013” (11%, down from 24%), followed by “other who was NOT an MP on 30 September 2013” (7%, down from 12%), followed by David Parker (4%, down from 5%), Jacinda Ardern (2%, down from 5%) and Andrew Little (2%, steady)

• John Key expected to remain National leader until at least the end of 2016 (73% probability, up from 71% last week)

• Paula Bennett is favourite to become National Party leader if a vacancy arises, (33% probability, down from 34% last week), followed by Steven Joyce (27%, down from 33%), Bill English (10%, down from 12%), Jonathan Coleman (8%, up from 1%) and Simon Bridges (7%, down from 8%)

• Bill English will remain Finance Minister after Saturday’s election (97% probability)

• Jonathan Coleman expected to be the next Health Minister (86% probability)

• Te Ururoa Flavell expected to be the next Maori Affairs Minister (99% probability)

• National expected to win 2017 General Election (52% probability, up from 50%)

Economics:

• Quarterly GDP growth expected to be:

o 0.9% of GDP in the September quarter (steady compared with last week)

o 1.0% in the December quarter (down from 1.1%)

o 1.0% in the March 2015 quarter (steady)

o 1.1% in the June 2015 quarter (steady)

• Unemployment expected to be 5.4% in September quarter (down from 5.5% last week) and 5.4% in the December quarter (steady)

• Current account deficit expected to be 3.5% of GDP in the September quarter and 4.0% of GDP in the December quarter (both steady)

• Annual inflation expected to be:

o 1.3% to end of September quarter (steady compared with last week)

o 1.6% to end of December quarter (steady)

o 1.9% to end of March 2015 quarter (up from 1.8%)

o 2.2% to end of June 2015 quarter (steady)

• Official Cash Rate priced to be:

o 3.502% on 30 October (down from 3.505% last week)

o 3.522% on 11 December (down from 3.533%)

o 3.556% on 29 January (up from 3.555%)

o 3.633% on 12 March (down from 3.642%)

o 3.746% on 30 April (down from 3.754%)

o 3.872 on 11 June (down from 3.914%)

• Fiscal surplus expected to be:

o 0.11% of GDP in 2014/15 (down from 0.14% last week)

o 0.95% of GDP in 2015/16 (steady)

o 1.98% of GDP in 2016/17 (steady)

o 2.37% of GDP in 2017/18 (steady)

Foreign Affairs/Constitution:

• New Zealand is not expected to be elected to the UN Security Council (with only 43% probability of appointment, down from 47% last week) nor is Helen Clark expected to be the next UN Secretary General (with only 26% probability of appointment, down from 38%)

• There is a 37% probability New Zealand and South Korea will sign a Free Trade Agreement by 1 December 2014

• There is a 30% probability New Zealand will become a republic by 2020

Notes:

• iPredict Ltd is owned by Victoria University of Wellington. Details on the company and its stocks can be found at www.ipredict.co.nz.

• The weekly economic and political update is prepared by Exceltium Ltd on a pro bono basis and is based on a snapshot taken at a random time each week. This week’s was taken at 11.02 am today.

ENDS

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