ECONOMIC & POLITICAL NEWSLETTER #5
8 March 2012
FOR IMMEDIATE RELEASE
• iPredict outperforms Washington Post in forecasting US Republican primaries
• World growth forecasts dip
• Liberal National overwhelmingly favoured over Labor in Queensland, although Campbell Newman’s odds of winning Ashgrove
dip to 77%
• New Zealand Labour continues to get stronger, with change of government expected in 2014
• Peter Beck, Lianne Dalziel and Aaron Keown all expected to stand for Christchurch mayoralty
• Australia and NZ to win joint hosting of the Square Kilometre Array
• New Zealand Defence Force to keep payroll services inhouse
The 6000 traders on New Zealand’s online predictions market, iPredict, have outperformed the Washington Post’s political writers in accurately forecasting the results of the Super Tuesday Republican Party primaries and caucuses
this week. iPredict accurately forecast the result of nine out of ten races, while the Washington Post’s experts had an accuracy rate of between 40% and 80%
Expectations for world growth in 2012
are down 0.09% this week, to just 3.09%. Meanwhile, Australia and New Zealand are expected to win joint hosting of the square Kilometre Array (SKA)
There is now only a 32% chance that the Defence Force will announce the outsourcing
of its payroll and administration functions before 2013, down from a 66% probability last week.
New Zealand Economic Forecasts
growth prospects have improved slightly this week, with growth expected to be 0.6% for the December 2011 quarter, 0.5%
for the March 2012 quarter and now 0.5% for the June 2012 quarter (up from 0.4% last week).
Forecast unemployment is unchanged this week, with the market still predicting unemployment of 6.4% for the March 2012
quarter and 6.3% for the June 2012 quarter.
Inflationary expectations have cooled slightly over the last week. Though inflation is forecast to remain steady at 1.6%
for the March 2012 quarter, it is expected to ease to 1.5% for the June 2012 quarter (down from 1.6%) and 1.7% for the
September 2012 quarter (down from 2.0%).
Following recent pessimistic data about New Zealand’s economic outlook, it is now expected that the Reserve Bank of New
Zealand will hold off increasing the Official Cash Rate until December 2012 at the earliest, whereas last week a
potential October rise was forecast.
Petrol prices are set to rise, with the market now indicating a 61% probability that 91 unleaded petrol prices will be
between 216 and 224
cents for the week ended 30 March 2012 (up from 58% last week).
The 2011/12 Fonterra payout is now expected to be $6.99 per kilogram of milk solids before retentions, down 3c over the
week. The forecast payout for 2012/13 has slipped 10c to $7.00, while forecast 2013/14 and 2014/15 payouts have remained
steady at $7.42 and $7.46 respectively.
Current account deficit expectations are 4.06% of GDP to December 2011, down 0.01 points on last week, and 4.27% to
March 2012, up 0.14 points on last week.
International Economic Forecasts
expectations have slipped, with growth now expected to be 3.09% for the 2012 year, down 0.09 points on last week.
There continues to be a 40% probability the US Senate will formally approve a resolution of ratification of the Trans Pacific Partnership by July 2015
Australian first preferences at the 2013 federal election
are expected to be: Liberal
38.5% (up from 33.9%), Labor
32.5% (down from 38.4%), Greens
9.6% (down from 10.9%), Queensland Liberal National
8.3% (down from 9.4%), and all other parties
10.0% (up from 9.4%). Stocks for smaller parties and for the two-party preferred vote will be launched tomorrow. There
is only a 31% probability that Julia Gillard will depart
as Labor leader before the next Federal election, but a 76% probability that she will lose
the next Federal election. Campbell Newman has a 77% probability of winning Ashgrove in the next Queensland state election
and his Liberal National Party has a 95% probability of defeating Labor in Queensland
In China, Wen Jinbao
is expected to remain the Premier of the People's Republic of China until at least 1 January 2013, Yang Jiechi
is expected to remain Minister of Foreign Affairs and Chen Deming
to remain Commerce and Trade Minister. However, Zhou Xiaochuan
is expected to be replaced as Governor of the People's Bank of China by year’s end, as is Xie Xuren
as Minister of Finance.
After iPredict’s success in forecasting US Republican Super Tuesday results –correctly forecasting the Alaska, Georgia,
Idaho, Massachusetts, Ohio, Oklahoma, Tennessee, Vermont, and Virginia caucuses and primaries - contracts will be
launched today for Kansas, Guam, Northern Mariana Island, and the US Virgin Islands, ready for the results on 10 March.
Contracts for Alabama, American Samoa, Hawaii, and Mississippi will be launched ready for the results on 13 March.
In the UK, the Conservative / Liberal Democrat coalition
is expected to survive 2012 (80% probability).
In France, however, there is a 62% probability Francois Hollande will win the presidential election
over incumbent Nicolas Sarkozy.
In Syria, Bashar al-Assad is expected to remain in power until at least 1 June 2012
. Contracts for 1 July, 1 August and 1 September will be launched next week.
There is a 28% probability Israel will launch an airstrike against Iran in 2012
, down from 31% last week and a 14% probability North Korea will detonate an atomic device
up from 13% last week.
Science and Climate Change
There is a 52% probability average global temperatures will be hotter in 2012 than in 2011
and a 10% probability 2012 will be the hottest year on record
. There is a 61% probability that Australia-New Zealand will win the hosting of the Square Kilometre Array
New Zealand Politics
iPredict’s traders continue to forecast an end to Peter Dunne’s 28-year parliamentary career, giving UnitedFuture just a
35% probability of winning a seat
in the next General Election. The Maori Party also appears to be in dire straits, with the market predicting that it
will only win two seats in the next General Election.
The Mana and Act parties are expected to win one seat each. The Green
, New Zealand First
and UnitedFuture parties are not expected to win any electorate seats.
Party vote forecasts are: National
40.6% (down from 42.6%), Labour
35.9% (up from 34.5%), Greens
9.6% (steady), NZ First
5.1% (steady), Conservative
2.7% (steady), Act
1.7% (steady), Maori Party
1.4% (steady), Mana Party
1.3% (steady), and UnitedFuture
0.7% (up from 0.5%). Parliament would consist of: National 51 MPs, Labour 45 MPs, the Greens 12 MPs, New Zealand First
6 MPs, the Maori, Act and the Mana Party 2 MPs each, UnitedFuture would have no MPs. There would be 120 MPs, requiring
61 to govern.
David Shearer’s Labour Party could form a Government with the support of the Greens, and either the New Zealand First,
the Maori or Mana Parties.
and Judith Collins
are favoured should there be a vacancy in the leadership of the Labour and National parties, respectively.
iPredict is owned by Victoria University of Wellington. Details on the company and its stocks can be found at www.ipredict.co.nz
. The weekly snapshot is taken at a random time each week. This week’s was taken on Thursday 8 March.