Chris Hipkins, New Zealand Prime Minister 2023

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Forums › Politics › Chris Hipkins, New Zealand Prime Minister 2023

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ezbee

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#3123623 4-Sep-2023 18:04

GDP is not everything though.
By all accounts Türkiye had great GDP growth in 2022, a stonking 5.6%, forecasts look ok as well.
If you look at their economic woes and inflation ?

Food and energy cost inflation hitting 56% peak, and currency well...
An effort to end an era of ultra-low borrowing costs has so far included three rate hikes by the central bank to 25%

johno1234

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#3124425 7-Sep-2023 08:41

ezbee:

GDP is not everything though.

This is true, but a bit like saying having a functional liver is not everything to a healthy body. A healthy GDP (specifically productivity growth) is still vital to a healthy economy so it can afford quality health, education and other nice things.

GV27

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#3124433 7-Sep-2023 08:54

ezbee:

An effort to end an era of ultra-low borrowing costs has so far included three rate hikes by the central bank to 25%

A huge, huge factor here is that Turkey initially took the scorched earth approach of delaying rate hikes to try and appease the wider population on political grounds. They tried to ride it out in the hope the inflationary pressures would ease but it got away from them massively.

If anything, Turkey is a lesson in the dangers letting political concerns override prudent monetary policy. Given the ongoing normalisation of our own central bank's issues, it is not hard to imagine us becoming a similar case study. The damage done in the last few years has been enormous, but accountability has been woeful if not non-existent.

johno1234

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#3124464 7-Sep-2023 10:12

GV27:

ezbee:

An effort to end an era of ultra-low borrowing costs has so far included three rate hikes by the central bank to 25%

A huge, huge factor here is that Turkey initially took the scorched earth approach of delaying rate hikes to try and appease the wider population on political grounds. They tried to ride it out in the hope the inflationary pressures would ease but it got away from them massively.

If anything, Turkey is a lesson in the dangers letting political concerns override prudent monetary policy. Given the ongoing normalisation of our own central bank's issues, it is not hard to imagine us becoming a similar case study. The damage done in the last few years has been enormous, but accountability has been woeful if not non-existent.

Nailed it.

The Reserve Bank had a simple mandate - control inflation using one lever, the OCR. That was changed to balance controlling inflation alongside unemployment.

The single mandate was like GST. Simple and it worked.

However inflation has been let out of the bag and now they cannot get it back into the bag. Stupid people made stupid, political decisions and now we pay, for decades.

ockel

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#3145726 12-Oct-2023 12:32

I'll say it again and again.

Vision without execution is just hallucination.

No plan, no road map, no idea of how to execute BHAGS.

https://www.rnz.co.nz/news/national/499985/te-whatu-ora-overhaul-no-overall-road-map-a-year-into-reform-briefings-show

Sixth Labour Government - "Vision without Execution is just Hallucination"

ezbee

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#3145795 12-Oct-2023 14:35

Our inflation does not really stand out, its pretty much in line with Australia.

We are in a Global cycle of inflation, much of what we consume, energy, manufactured goods, capital equipment is imported.
Finance costs more due to higher reserve bank rates globally, and the odd conflict.

At the end of a very long shipping route that really goes out of its way to get here.

Pretty much the world is doing equivalent of 'Quantitative Tightening' to pull back money printed in Covid.
Higher bank rates elsewhere and money moving to safety also moves exchange rates.

Tax cuts , cut Government to pay for it and all's good for the UK.
Until the global economic system reminds you.
Chancellor Jeremy Hunt has said it will be "virtually impossible" to deliver tax cuts until the UK economy improves.
https://www.bbc.com/news/uk-politics-66886514

We are in pretty similar territory inflation wise to Australia.

Australia has a lot of advantages re various things it can dig up and export. ( Yeh the lucky country ) :-)
This lists us both at 6% as per 23rd Jun , A few months old, but it does list everyone else so you can compare.
https://tradingeconomics.com/country-list/inflation-rate-

EU 5.8% at 23rd Aug, Ireland 6.3% at Aug/23, UK 6.7% Aug/23,

Without being on a major trading route, near to many major markets.
Lack of easy extractive wealth, Oil/Gas/Gold/Minerals etc...
We might be expected to be much more trouble economy that what we are, as last stop before Antartica.

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