Weekly Global Economic Round-up – 7 November 2022

Prepared by the Economic Division at the Ministry of Foreign Affairs and Trade.

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Regional Updates

Domestic Updates

  • Thousands of working holiday makers overseas now have new visas and are set to bring key skills to the New Zealand economy over the next three months, after the Government extended the visas of offshore working holiday makers, Immigration Minister Michael Wood has announced. Over 34,200 working holiday visa applications have been approved(external link), with 14,400 visa holders arriving in New Zealand since borders reopened.
  • New Zealand’s unemployment rate remains unchanged at 3.3 percent in the September 2022 quarter, reflecting an extremely tight labour market.

Australia and the Pacific

  • New Zealand Minister for Trade and Export Growth Damien O'Connor, joined by New Zealand Minister for Tourism Stuart Nash, hosted Australian Minister for Trade and Tourism Don Farrell, in Queenstown on 29-30 October to advance trans-Tasman cooperation under the Australia-New Zealand Closer Economic Relations Trade Agreement (CER). The 40th anniversary of CER in 2023 is an opportunity to ensure our comprehensive bilateral trading architecture is dynamic and future-focused, and that businesses and people on both sides of the Tasman can continue to respond to global challenges and capitalise on new opportunities.
  • Ministers discussed areas with great potential for cooperation in the anniversary year and for ongoing collaboration, including Indigenous cultural and economic connections; clean energy and climate change policy; and research, innovation and emerging technologies. Australia and New Zealand will consider how we can both champion sustainable and inclusive trade(external link).
  • The Reserve Bank of Australia announced an increase to the cash rate by 25 basis point to 2.85 percent. The decision statement cited the need to establish more sustainable supply and demand in the domestic economy to help return to target inflation levels helped drive the decision to increase the cash rate. Australia’s inflation for the year to September is 7.3 percent and the RBA forecasts this to peak at around 8 percent later this year.
  • Officials from New Zealand and 13 other economies will gather in Australia, in mid-December 2022 to begin negotiations toward the Indo-Pacific Economic Framework for Prosperity (IPEF). This will be the first opportunity for in-person negotiations on all four pillars since the Ministerial launch on 9 September in Los Angeles. The Indo-Pacific Economic Framework for Prosperity is an opportunity to strengthen economic cooperation with the United States and a diverse range of other economies across our wider home region.

Europe

Asia

  • The 20th National Congress of the Communist Party of China (CPC) also saw the release the political report(external link) of the 19th CPC Central Committee. This is the central policy document for the Congress, and outlines China’s direction for the next five years and beyond as it navigates “global changes of a magnitude not seen in a century”. The report recognised the economic headwinds China is facing, including employment, inequality, and demographic challenges. Xi’s economic directives of “common prosperity” and “dual circulation” were emphasised as core policy responses.

Americas

  • Leftist and now-third time president Luíz Inácio Lula da Silva (Lula) has claimed victory in Brazil’s presidential election, winning 50.9% of votes against incumbent far-right President Jair Messias Bolsonaro’s 49.1%, with a difference of only 1.8% between the candidates. In his acceptance speech, Lula committed to empowering minoritised populations, lifting millions out of poverty with a return to state-driven economic and social policies, and making Brazil a global leader on climate change. One of his key challenges will be obtaining congressional approval for his proposed social spending, with a congress dominated by conservatives and a much more challenging global economic environment compared to his previous two terms. Some pro-Bolsonaro protests have caused disruption, particularly trucker blockade. However, most have now dispersed after Bolsonaro discouraged supporters from blocking highways. The transition process has been set in motion to prepare for Lula taking up the presidency on 1 January 2023.
  • The US Federal Reserve (Fed) has increased interest rates by 0.75 percent to 3.75 to 4 percent. The Fed anticipates further increases to the target range in order to return to target inflation levels.

Market reports released this week

External links

The following links may provide useful information to businesses:

  • NZTE(external link) has a website focused on providing COVID-19 information for exporters. They’ve also launched myNZTE(external link), an interactive digital portal of insights and tools available to all New Zealand exporters.
  • The Treasury releases a weekly economic update(external link) every Friday. Stats NZ has published a data portal(external link) with near real-time economic indicators.
  • MBIE publishes a sector reports series(external link) which provides regularly updated reports on all industry sectors that make up the New Zealand economy. These include official economic data and the challenges and opportunities that face New Zealand’s industry sectors.
  • Business.govt.nz(external link) provides tools and advice from across government to save small businesses’ time and help make the business a success.
  • MFAT has created a tariff finder(external link) which is designed to help goods exporters and importers maximise benefits from New Zealand’s Free Trade Agreements and compare tariffs in 136 other markets.
  • The all of government Trade Barriers(external link) website can be used to register any trade barriers experienced or issues exporting to an offshore market. Queries can be sent via the website or through the MFAT Exporter Helpline 0800 824 605. Enquiries will be sent to the government agency best placed to answer.
  • Tatauranga Aotearoa Stats NZ provides official data on the value of New Zealand’s exports and imports of both goods and services, by commodity type via the New Zealand Trade Dashboard(external link). This interactive dashboard is updated every quarter and allows for filtering by country and by commodity type.

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Disclaimer

This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report.

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