Articles

The Clean Car Discount is now in full swing, with rebates on ‘clean cars’ reaching up to $8,625 for new electric vehicles while the heaviest polluters face a maximum penalty of $5,175. There has already been a shift in the number of cleaner cars being purchased, particularly for electric vehicles.

New Zealand’s second-hand car market is highly dependent on imports from Japan. Japan is one of few large car-producing nations that also drives on the left-hand side of the road, making New Zealand a logical potential buyer of used cars.

Fuel prices have shot up in recent weeks after tough sanctions were imposed on Russian oil and gas companies and their exports by a large suite of countries.

Fuel prices were already high at the beginning of 2022 as supply chains and fuel production weren’t keeping up with the rebound in global demand. Resurgent economic activity due to easing COVID-19 restrictions worldwide has meant demand for fuel has recovered from its slump in 2020 and early 2021. On top of this, the war in Ukraine and the subsequent sanctions imposed on Russia have only exacerbated the upwards fuel price spiral.

Last month we looked at how quickly international travel will return as New Zealand’s borders reopen. Evidence from people movements between other countries suggests an eagerness to travel again, especially if there are no restrictions. For example, flight numbers between the US and Mexico are now sitting above pre-pandemic levels.

One of the starkest contrasts of pre- and post-pandemic life is how much less connected we are with overseas countries. International travel was obliterated almost everywhere in about a month when COVID-19 began its spread across the globe. Airline companies slashed their capacity in response, sending surplus planes to the desert where they won’t depreciate as quickly. The domestic tourism boom has helped local airline traffic to recover, although our ongoing isolation continues to negatively affect the tourism sector. Overseas evidence shows that as travel restrictions have eased, people are keen to get back out and explore, but activity has not returned to pre-pandemic levels yet.

With the COVID-19 Protection Framework (the “Traffic Light” system) in place and COVID-19 cases spreading insidiously across the country, economic activity this summer is looking likely to be slower than the 2020/21 summer. The removal of Red light restrictions on 30 December for everywhere besides Northland will offer some further economic relief for many businesses. However, the timing of this shift means that districts currently in Red will likely see less traffic over summer than they usually would, as people stay away from restrictions while they can. With lower levels of economic activity, freight volume movements are also expected to be lower.

China has become a posterchild for developing nations and having lifted hundreds of millions of people out of poverty, you can see why. Despite its authoritarian-style rule and being a greater champion of the state than the individual, China’s economy has done extremely well after adopting a more open economy and market-driven principals in the late 1970s. How long can this dream run for China’s “socialist market economy” go on for?

The last 18 months have been a strange time for prices. Before the pandemic, economists would talk nostalgically about inflation as though it were a thing of the past. Very few expected the price pressures we are seeing today, and many believe it’ll all be over soon. However, the apparent transitory nature of these price rises is being questioned more and more, and we expect inflation could hold higher for longer.

The free trade agreement signed earlier this month between New Zealand and the United Kingdom will open up huge opportunities for local exporters. The Free Trade Agreement (FTA) will eliminate all tariffs on New Zealand exports, with 97% of them being removed the day the FTA comes into force. Although, the government estimates the FTA will boost GDP by $1b we have used our Export Market Finder tool to identify some of the top opportunities for New Zealand exporters.