iPredict Ltd New Zealand Weekly Economic & Political Update

www.ipredict.co.nz
ROBERTSON MAKES GAINS BUT LITTLE STILL PICKED FOR LABOUR LEADERSHIP

Grant Robertson has made gains this week but Andrew Little remains strongly favoured to be the next leader of the Labour Party, according to the combined wisdom of the 8000+ registered traders on New Zealand’s predictions market, iPredict. There is no clarity on who is likely to be Mr Little’s target="_blank">deputy. Inflation and interest rate expectations have fallen again and a fiscal deficit of 0.07% of GDP is expected in target="_blank">2014/15. Despite target="_blank">news reports overnight, there continues to be little confidence a Trans Pacific Partnership Agreement will be ratified by the US Congress in the foreseeable future.
Politics:

• Next Labour Leader expected to be:
o Andrew Little 68% probability (down from 70% probability last week)
o Grant Robertson 26% probability (up from 21% last week)
o David Parker 6% probability (down from 8% last week)
o Nanaia Mahuta 0% probability (steady compared with last week)
• Next Labour Deputy Leader expected to be:
o Jacinda Ardern 38% probability (down from 53% last week)
o Grant Robertson 12% probability (down from 14% last week)
o Annette King 12% probability (up from 8% last week)
o Andrew Little 9% probability (up from 6% last week)
o Nanaia Mahuta 7% probability (down from 8% last week)
o David Parker 7% probability (up from 5% last week)
o David Shearer 6% probability (up from 2% last week)
o Stuart Nash 4% probability (up from 2% last week)
o Other 4% probability (up from 2% last week)

• John Key expected to remain National leader until at least the end of 2016 (74% probability, up from 73% last week) and has a 49% probability of remaining National leader until at least the end of 2017 (up from 48% last week)

• Steven Joyce is favourite to become National Party leader if a vacancy arises, (33% probability, down from 34% last week), followed by Paula Bennett (30%, up from 28% last week), Bill English (9%, steady compared with last week) and Simon Bridges (7%, steady compared with last week)

• Next election expected in 2017 (92% probability, steady compared with last week)

• National expected to win 2017 General Election (53% probability, steady)

Economics:
• Quarterly GDP growth expected to be:
o 0.8% of GDP in the September quarter (steady compared with last week)
o 0.8% in the December quarter (down from 0.9% last week)
o 1.0% in the March 2015 quarter (steady)
o 1.1% in the June 2015 quarter (steady)

• Unemployment expected to be 5.4% in September quarter (steady compared with last week) and 5.4% in the December quarter (down from 5.5% last week)

• Current account deficit expected to be 2.6% of GDP in the September quarter (down from 3.0% last week) and 3.9% of GDP in the December quarter (down from 4.0% last week)
• Annual inflation expected to be:

o 1.2% to end of December quarter (down from 1.4% last week)
o 1.5% to end of March 2015 quarter (down from 1.8% last week)
o 1.8% to end of June 2015 quarter (down from 2.2% last week)
o Stocks for the September 2015 quarter will be launched this week

• Official Cash Rate priced to be:

o 3.500% on 30 October (down from 3.503% last week)
o 3.509% on 11 December (down from 3.512% last week)
o 3.518% on 29 January (down from 3.527% last week)
o 3.552% on 12 March (down from 3.583% last week)
o 3.608% on 30 April (down from 3.661% last week)
o 3.693% on 11 June (down from 3.770% last week)
o OCR stocks out to June 2016 will be launched this week

• Fiscal surplus expected to be:

o -0.07% of GDP in 2014/15 (down from 0.02% last week)
o 0.95% of GDP in 2015/16 (steady)
o 1.98% of GDP in 2016/17 (steady)
o 2.37% of GDP in 2017/18 (steady)

Foreign Affairs/Constitution:

• There is a 43% probability New Zealand and South Korea will sign a Free Trade Agreement by 1 December 2014 (up from 29% last week)

• The Trans-Pacific Partnership is not expected to be ratified by the US Congress before 1 July 2017 (only 20% probability it will be, steady)

• Helen Clark’s prospects of being the next UN Secretary General have improved to 35% probability, up from 29% last week
• There is a 21% probability New Zealand will become a republic by 2020 (steady)

Notes:
• iPredict Ltd is owned by Victoria University of Wellington. Details on the company and its stocks can be found at www.ipredict.co.nz.
• The weekly economic and political update is prepared by Exceltium Ltd on a pro bono basis and is based on a snapshot taken at a random time each week. This week’s was taken at 9.46 am today.

ENDS

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