FXStreet (Bali) – Philip Borkin, Senior Economist at ANZ, notes that the main issues facing the Canadian economy are remarkably similar to those facing New Zealand presently.
Key Quotes
“Replace “dairy” with “oil” and “Auckland house prices” with “Vancouver or Toronto” and the main talking points are the same. Both economies are dealing with terms of trade shocks, sub-trend growth, stark regional house price growth divergences and increased financial stability risks.”
“There is also plenty of discussion on the impact that foreign investors are having on regional housing markets and what the appropriate policy response should be.
“It is often useful to take a step back at times and remind oneself that many of the current issues facing the New Zealand economy (perhaps outside of the earthquake rebuild) are also global ones.”
“That of course does not make it any easier for those at the coalface, but it does reinforce that importance of having a sound microeconomic policy agenda to ensure the economy more generally has the resilience to help deal with challenges.”
“This agenda certainly doesn’t mitigate the risk profile for the economy entirely (that is still skewed lower), but it is one thing we feel has put the economy in a better place to deal with these challenges than has been the case in the past.”
(Market News Provided by FXstreet)