RBNZ releases economic scenarios ahead of much-anticipated Monetary Policy Statement; Takes a more upbeat view than Treasury, but notes that even at Level 1 international tourism will be reduced to 10% of normal activity

I agree with this assessment. Social distancing, additional hygiene standards and companies operating in half-measures will make many companies that appear to be operating close to normal, be far from it. Companies with both staff at home and in the office leads to many impedance mismatches, as well as companies still offering many home deliveries. For many businesses it will be as if they're running two separate companies and without the resources to do both.

Et tu Brutus , we cant trust anything the Government or its agencies says right now in relation to this issue .

I, for one, dont believe a word of this spin .

And if they are lying , its going to turn around and bite them on the arse

Despite your typo the isn't much energy input according to Z Energy's weekly market announcement on fuel consumption. Last week shows a pick up in petrol and diesel consumption but clearly not enough to get the massive boosts that RBNZ is claiming. Perhaps the RBNZ should use data instead of fabricated predictions.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/atta…

I'm a builder and following the rules and the slow supply of materials is adding serious time. Materials that I ordered last week, still not arrived.
Have heard of lots of sites where they are not following the rules.

There has always been an 'us and them'. The only thing that matters "Who 'them' is!", and if you work hard; do as your told and don't rock the boat, then you too, can become one of Them. (or so we are falsely led to believe. And the sad thing is, that bribe works!)

Obviously the UK subject is an academic, in which case one might have thought, such lust could have been handled academically.

The Imperial Model was given to the UK government mid March. China, Italy and several other countries had already implemented lockdowns well before mid March. China's lockdown was February. Italy was 2 weeks prior. How can the Imperial model have caused the lockdowns when there were already several lockdowns in place before the UK government had even seen this one?

There is very much the, 'don't you know who I am' culture in NZ I have found.

It does depend on what you base case is but it seems to me a 10% reduction in GDP would be an optimistic scenario this year.

If the government is relying solely on RBNZ and ignores Treasury estimates for their upcoming budget and policies, there's going to be hell to pay. But at least from my view of the past, this is exactly what is going to happen.

Totally agree, otherwise why would they send an internal memo to MSD expecting 300k of newly unemployed.Maybe 1 + 1 =3

If RBNZ is counting anyone working from home with kids off school as normal levels of productivity then I would like to introduce them to my 2pm glass of red wine habit.

I suspect they are counting on our main industry picking up after the lockdown. Namely, the Holy Real Estate Industry. Perhaps they've been reading some of the spruikers' comments here. Remember, Ye Olde Property Clock is going to tick soon, doubling the value of real estate all over New Zealand.

@Fritz your comments remind me of a school play I saw 55 years ago written by Hans Christian Anderson ............The Emperor's New Clothes .

Thanks for pointing out the load of cods being fed to us by the Government

Agreed. I'm a Registered Nurse and my workload is at least half what it usually is. Lots of surgical nurses coming to work with no patients to look after! Dropped my daughter at daycare where 3 teachers were looking after four kids.

That's interesting, everyone I know who was working at home during Level 4 (including my partner and myself) has been extremely busy. Starting earlier and finishing later, some weekends as well. No boundaries between work and home life at all. It's got a bit more relaxed now, but overall we've been extremely productive. Easily more so than actually being at the office.

Or....

it highlights how superfluous retail and the buying and selling of houses is to producing GDP. Most retail items are imported and mountains of debt piled into asset speculation obviously don't produce anything,

it highlights that GDP and the "wealth of nations" are flawed measurements for understanding a healthy economy

Not even that in many sectors!

Yea they are beyond dreaming.... no way....

marmiteJ. You make a good point about the flow on effect of businesses cutting costs. We have taken the scalpel to every bit of spending we can. Any 'nice to haves' are gone, most cleaning etc has been in-housed. One of these external service suppliers said he rapidly lost over 50% of his clients. Staff who would have once given you a strange look if you told them they now had to also mow the front berm and weed the garden are suddenly very happy to do whatever it takes.

What about the wealth effect? Like the shareholders who just took a hit and the property investors who are likely to now take a hit?

Its easy they are part of the government in the Bar graph, operating at 90% the whole time, so they have to produce some sort of report to account for their 90%. It does'nt mean it is accurate, just that they are producing reports. If they bothered to go for a walk down any main street they would soon reallise nothing is operating at 80%. The scary thing is they are making decisions off these models.

Bingo middleman. But even without that glaring omission, they're still dreaming. There is no way productivity is near normal levels for most.

Consumers have also lost huge amounts of spending power on whatever money they do spend as well. Supermarket shops are probably +20% in price terms of the same basket of goods atm, which will be skewing things given how much of retail trading they probably account for. We almost need a pre-Covid19 baseline for a lot of these things else they will become meaningless.

and me as well please. As Bob Jones says, right wing folk are generally better at business but boring as batshit, lefties haven't a clue about how to run an economy but make much more interesting neighbours and dinner companions.

That's grim. Sadly a lot more to come. We have made up our lists of names but are hoping we can get through with under 25% having to be let go.

@LJM except this 'float " as you call it has had about as much positive acceptance from readers as a turd floating in a swimming pool .

Quite simply , no one is buying this floating turd , and I suggest the Government withdraws the document before it becomes a major embarrassment .

Thank you Ralph

The following sectors will almost all see insolvencies rise

Cars sales companies
Small retailers
Gyms
Clothing and footwear ,lots of to let signs on Ponsonby Road
Personal services such as salons and so on
Retail property landlord's companies
Marginal fuel filling stations
Travel agencies
Immigration consultants
Private colleges for foreign students

I could think of others , but this is just hose that spring to mind

Those fools in their secure jobs at RBNZ and Treasury are so divorced from reality its simply stunning , and to think they came up with this garbage is an indictment on their competence

Not really sure what you're expecting from him Boatman. He'll allocate some spending, we'll have a big deficit...wages will still be down, debt will still be up, so will unemployment.

Isn't that just level 1? If so, yes. Agreed. We should be in level 2 now, as we just work out the gremlins in any tracking system and then level 1 next week.

Far easier to keep the people scared and grateful for it.