As New Zealand navigates the post-Covid economic recovery, there’s been no shortage of commentary from financial experts, industry figures, and policymakers. One voice that’s been particularly prominent is that of business journalist Liam Dann. As the editor-at-large for the New Zealand Herald, Dann has offered insights and analysis on everything from the stock market to the housing market, and he’s not afraid to ask the tough questions. In this article, we’ll look at Dann’s recent musings on the state of the economy and whether we can expect the good times to keep rolling. Specifically, we’ll explore his thoughts on when the post-Covid party will end, and what that might mean for businesses and individuals across the country.
According to last week’s card spending data, it appears that many individuals have not yet received the message about the need to slow down. Despite signs of moderation in retail spending, expenditures on travel and hospitality are at an all-time high. This raises the question – are we partying our way into a recession? Reserve Bank Governor Adrian Orr has been urging the public to save up for an impending rainy day; failure to do so could result in higher interest rates, a deeper recession, and increased job losses. However, some individuals seem to disregard these warnings. For instance, spending on hospitality was up by 32.3% or $933 million in the first quarter of this year compared to the same period in 2020. Although year-on-year comparisons may not be favorable, non-retail spending increased by 11.4% in March compared to February, and spending on hospitality surged by 14.5%. This trend is alarming as the message from the Reserve Bank should be clear by now – prepare for an economic downturn. The article suggests that the young and old may be less likely to heed this message due to factors such as job security, mortgages, and the desire for experiences. However, if we cannot rely on these demographics to reduce their spending, the burden may fall on people in their 30s and 40s with young families and large mortgages. This article emphasizes the need for individuals to recognize the potential consequences of failing to moderate their spending habits.
In conclusion, Liam Dann has explored the current economic climate and how its recovery from the effects of Covid-19 may not be as straight forward as we think. The post-Covid party has been a much-needed relief, but it’s important to remember that it’s not sustainable in the long term. As global governments continue to find new ways to reduce debt, inflation rates and keep the economy stable, the future remains uncertain. As we navigate through these unchartered waters, we must remain aware of the risks and prepare ourselves for any economic slowdowns that may occur in the future. Only time will tell when the post-Covid party will come to an end, but one thing is for sure – we need to be ready.
