Does the gathering global gloom matter?

Auckland Council Chief Economist, David Norman
Auckland Council Chief Economist
Publication date:
  • The global outlook has weakened with some talk of recession emerging.
  • Auckland and New Zealand are not immune from offshore impacts – it will affect us directly and indirectly.
  • Auckland in particular starts from a position of exceptional strength, which will make it easier to weather the effects of slower offshore growth.
  • Other buffers include Auckland’s industry structure, a better banking regulatory regime, a proactive Reserve Bank, and strong central government surpluses available if needed.

We are bombarded by stories of impending economic doom, particularly focused on what is happening offshore. Risk of recession in the US and Europe, and weaker growth in China, which was the stalwart that helped keep global economic growth above zero through the

Global Financial Crisis (GFC) 10 plus years ago. In New Zealand, business sentiment is the weakest in 10 years. Does this gathering global and domestic gloom matter to Auckland? The short answer is yes, of course it does. But a more meaningful question is: How much does it matter? Or how well insulated is Auckland against these risks?

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Last updated: 2019-10-31