New Zealand Prime Minister John Key secured the nation’s first majority government in almost 20 years on a promise to maintain a strong economy, but slowing growth in China may challenge his outlook and also threaten fiscal discipline.
Key’s center-right National party stormed to a third straight term in general elections on Saturday after promising to stay on the path of economic growth and fiscal prudence, despite one of the roughest campaigns in recent years.
National steered New Zealand’s economy back to growth after the global financial crisis, with rising immigration and building projects in the largest city, Auckland, and in the earthquake-hit Canterbury region also boosting demand and investment. Dairy exports, which account for one-quarter of all goods New Zealand sells overseas, have also soared.
Photo: Reuters
New Zealand’s relatively small economy has outperformed many of those in developed countries, with data in the past few days showing growth at an annualized 3.9 percent in the second quarter, its fastest pace in a decade.
However, the government and economists expect growth to moderate in the coming years as New Zealand feels the impact of rising interest rates and an historically strong domestic currency. A slump in global prices for dairy products is seen knocking the terms of trade from a 40-year high.
Slowing growth in major trading partner China could also sting the New Zealand economy if it curbs demand for agricultural exports, economists say.
“It’s still not clear how much the Chinese economy is slowing... China is an issue for New Zealand because they’re our largest trading partner and impact our commodity prices,” Deutsche Bank New Zealand head economist Darren Gibbs said.
The government has pledged to maintain the “status quo” on economic policy, but Gibbs said Key’s plan to balance the books from next year onward could be challenged by external factors, along with rising incomes.
“National is pretty committed to achieving a surplus, but it will be very difficult to build extra surpluses. As the labor market tightens, pressure is going to build to pay public servants more,” he said.
POLITICAL PRISONERS VS DEPORTEES: Venezuela’s prosecutor’s office slammed the call by El Salvador’s leader, accusing him of crimes against humanity Salvadoran President Nayib Bukele on Sunday proposed carrying out a prisoner swap with Venezuela, suggesting he would exchange Venezuelan deportees from the US his government has kept imprisoned for what he called “political prisoners” in Venezuela. In a post on X, directed at Venezuelan President Nicolas Maduro, Bukele listed off a number of family members of high-level opposition figures in Venezuela, journalists and activists detained during the South American government’s electoral crackdown last year. “The only reason they are imprisoned is for having opposed you and your electoral fraud,” he wrote to Maduro. “However, I want to propose a humanitarian agreement that
ECONOMIC WORRIES: The ruling PAP faces voters amid concerns that the city-state faces the possibility of a recession and job losses amid Washington’s tariffs Singapore yesterday finalized contestants for its general election on Saturday next week, with the ruling People’s Action Party (PAP) fielding 32 new candidates in the biggest refresh of the party that has ruled the city-state since independence in 1965. The move follows a pledge by Singaporean Prime Minister Lawrence Wong (黃循財), who took office last year and assumed the PAP leadership, to “bring in new blood, new ideas and new energy” to steer the country of 6 million people. His latest shake-up beats that of predecessors Lee Hsien Loong (李顯龍) and Goh Chok Tong (吳作棟), who replaced 24 and 11 politicians respectively
Young women standing idly around a park in Tokyo’s west suggest that a giant statue of Godzilla is not the only attraction for a record number of foreign tourists. Their faces lit by the cold glow of their phones, the women lining Okubo Park are evidence that sex tourism has developed as a dark flipside to the bustling Kabukicho nightlife district. Increasing numbers of foreign men are flocking to the area after seeing videos on social media. One of the women said that the area near Kabukicho, where Godzilla rumbles and belches smoke atop a cinema, has become a “real
‘POINT OF NO RETURN’: The Caribbean nation needs increased international funding and support for a multinational force to help police tackle expanding gang violence The top UN official in Haiti on Monday sounded an alarm to the UN Security Council that escalating gang violence is liable to lead the Caribbean nation to “a point of no return.” Special Representative of the UN Secretary-General for Haiti Maria Isabel Salvador said that “Haiti could face total chaos” without increased funding and support for the operation of the Kenya-led multinational force helping Haiti’s police to tackle the gangs’ expanding violence into areas beyond the capital, Port-Au-Prince. Most recently, gangs seized the city of Mirebalais in central Haiti, and during the attack more than 500 prisoners were freed, she said.
RSS