tag:blogger.com,1999:blog-7342528022617501525.post6696476948782964583..comments2024-03-28T15:05:33.781+13:00Comments on Economics New Zealand: Overoptimistic Budget forecasts? Donal Curtinhttp://www.blogger.com/profile/03687495556590450225noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-7342528022617501525.post-28796178515656947542016-06-01T23:36:05.508+12:002016-06-01T23:36:05.508+12:00No worries, I didn't feel like you were having...No worries, I didn't feel like you were having a go at our view. Our latest economic overview (link below) has a chart of our construction forecasts, including the rebuild aspect. We've gone into the rebuild profile in more detail in some past reports, but I'd have to do a bit of digging to find it.<br /><br />www.westpac.co.nz/assets/Business/Economic-Updates/2016/Bulletins-2016/Westpac-QEO-May-2016_EMAIL.pdfMichael Gordonnoreply@blogger.comtag:blogger.com,1999:blog-7342528022617501525.post-2542540079247459202016-05-30T09:06:37.661+12:002016-05-30T09:06:37.661+12:00Thanks Michael and as I said to Michael Gordon (ab...Thanks Michael and as I said to Michael Gordon (above) apologies for slow response, I've been away. I had a look at that forecasting report (and thanks for mentioning it, I missed it in the Budget hubbub) and yes, there does seem to be some overoptimism over the longer time horizons (and no, I'm not worried about the 95% either). Suggests, maybe, they have too high a view of potential output growth?Donal Curtinhttps://www.blogger.com/profile/03687495556590450225noreply@blogger.comtag:blogger.com,1999:blog-7342528022617501525.post-65754988655401449632016-05-30T08:53:49.468+12:002016-05-30T08:53:49.468+12:00Thanks Michael (and apologies for slow reply, I wa...Thanks Michael (and apologies for slow reply, I was away all weekend on a course). I wasn't taking issue with your view specifically, BTW, but more the 'usual suspects' list down one end of the political spectrum: my main point was that Treasury's view wasn't that far away from the mainstream. That said, I'd certainly agree (at a minimum) that the risks are to the downside, and if you folks were minded to put some figures round a plausible Canterbury wind-down and the Auckland wind-up and show us what the overall aggregate looked like (if you haven't already - I may have missed it) I'd be v interested.<br />Incidentally that Irish net migration modelling I mentioned had (from memory) a threshold effect in it - if the unemployment rate differential between the UK and Ireland was modest (I seem to remember <4%), people didn't bother moving, which makes sense, but they did when it was bigger than thatDonal Curtinhttps://www.blogger.com/profile/03687495556590450225noreply@blogger.comtag:blogger.com,1999:blog-7342528022617501525.post-83355495430494755172016-05-27T20:52:35.046+12:002016-05-27T20:52:35.046+12:00Fair point Donal but Tsy does still have higher GD...Fair point Donal but Tsy does still have higher GDp growth throughout, and over recent year Tsy and Consensus have been overly optimistic. (I know it doesn't show at a 95% significance level in the recent Tsy forecast error report, but that is partly a small sample problem.)Michael Reddellnoreply@blogger.comtag:blogger.com,1999:blog-7342528022617501525.post-64597915364307694652016-05-27T18:39:56.966+12:002016-05-27T18:39:56.966+12:00Donal, you might feel like you've been reading...Donal, you might feel like you've been reading this a lot because we (Westpac) got our review out quickly and ended up nabbing a lot of the media coverage. And our growth forecasts in the outer years are a lot lower than consensus, let alone Treasury. As for why they're so low - mostly we've been emphasising the wind-down of the Christchurch rebuild (and I see that the consensus forecast for residential investment is a lot lower than Treasury's, so we're not entirely alone on that front).Michael Gordonnoreply@blogger.com