2024 was a year when interest rates turned lower, when 'normalisation' occurred in the world's largest economies. Inflation was tamed, or at least quelled after the pandemic run-up. Public policy-making settled down to 'normal standards'.
We reviewed how that looked for savers here, and borrowers here.
But 2025 might well be quite different. After all, the world's largest economy will be being led by a recycled Don, a 78 year old grifter with his last chance to cash in. That is sure to generate a wild ride.
And new risks.
Those risks will get priced in. And those risk pricings will wash over us. Costs will probably get distorted. When things inevitably don't work out "for him", blame, retaliation and retribution are likely to twist the policy responses, all of which will raise risk further.
If higher risk is reflected in higher interest rates, yield investments like real estate (both residential and commercial) may have a hard time justifying their current prices.
Unfortunately New Zealand will start the new year uniquely in recession, along with all the social pressures that brings. An unstable global situation is unlikely to be helpful getting us out of recession.
And then there are the geo-political stresses. Who knows where that goes? But perhaps you do?
And there will be climate stress. That too will cause local impacts. Would you invest in petrol stations?, buy on a flood plain? or near coastal lowlands? If you do, will you expect society to bail you out if things go pear-shaped? Should insurers be required to cover those risks and spread the costs over everyone else? Should banks lend when those risks seem obvious.
Will we tolerate un-priced risk any more? Can we resist the socialising of losses? We may have to when public budgets are in growing deficit.
Anyway, there is lots to talk about.
How do you think our economy (housing, agriculture, tourism, education, to name the key sectors in decreasing size) will fare in 2025?
And don't forget those climate predictions. Pretend you are an insurer (or a lender).
Who will be the winners in 2025? The losers?
It is time to test your prediction skills and bravely record them here in the Comment stream below. (Sign up here.)
And of course there is the small matter of bragging rights on your 2024 predictions. How good were they? Here is a quick link to last year's set. More than 200 of you weighed in again last year. Almost 15,000 readers watched that particular debate.
This article is to encourage you to record your 2025 predictions.
Your predictions can be on any topic that has an impact on the New Zealand economy: anything, including property, interest rates, exchange rates, the RBNZ, insurance, rural issues, the dairy payout, our migration issues, our relationship with China, the big international economic influences, even the shifting international power balance, and the like. But please try to ground them in the economy. (For example fashion, sporting or celebrity comments are not relevant, but climate change issues certainly are.)
You will need to be logged in to comment and respect our commenting policies (and respond to others' differing views in a respectful and civil way).
Grab a wine or a beer. Settle in. Over to you.
179 Comments
Decided not to predict last year. JFoe wasn’t far off!
Here’s some thoughts for 2025:
- Economy will continue to be ugly, especially until Spring. GDP growth of around 1 to 1.5% over the year
- Unemployment to increase to around 5.5%
- OCR to be cut to 3%. Outside chance it will go to 2.5%, but I think the RBNZ will be scared of inflation re-emerging
- 1 and 2 year mortgage rates to bottom out around 5 to 5.25%
- House prices flattish, small lift (2-3%) in final quarter of ‘25
- Most sectors of economy will struggle. Small pick up in retail / hospo second half of the year. Professional services will struggle. Manufacturing flat. Residential construction will really struggle again. Commercial better, but not much
Uptick for your optimism which I hope proves accurate. Uncertin the local effects of continuing inflationery non tradables on cost of living and the vast uncertainty of global disruption and tensions and their effeect of NZ - I am cautiously optimistic with a keen watch on developments.
In the last half of 2025 Labour will announce new leadership who will poll markedly higher than PM Luxon and resultantly exert much pressure on that incumbency. The introduction of ACT’s Seymour as deputy PM, while not actually disruptive, will nonetheless test the coalition’s adhesiveness. In turn, having those two factors brewing will be quite a challenge for National as they enter election year 2026. The Greens will re-emerge from the hidings they have given themselves of late, and resume as the most excessively strident party in parliament, except for TPM.
Ranking mine from last year:
1) BTC ETF approved next week. Price skyrockets into the low 50s, then retreats, then back up again once they go live. New ATH towards mid year - but crash going into the end of the year (say into the 30s?)
7/10 generally right except for the big crash (we did have a little correction though)
2) ETH ETF is next. ETH finally outpaces BTC this year, new ATH and to around 7k at peak (again mid year)
4/10 got the ETF right but nothing else
3) Labour will poll in the teens, Hipkins is out, Kieran takes over
Nope!
4) Trump wins the election - he starts planning his revenge pretty soon after.
10/10 - I would say he is very much planning revenge
5) NZX actually has a good year.
10/10 - I think 10% counts
6) Argentina has one of the best returns in terms of its sharemarket (and economy generally). Only beaten by El Salvadore in the region
10/10 - Up around 80% in a year. I don't have a good read on El Salvadore but they are doing well
7) We get a couple of interest rate cuts. USA ends the year with inflation down to 2%. We are closer to 3.5%
5/10 - close but the wrong way around. I didn't think we would be the leaders on inflation beating
8) House prices are back up - say around 8 percent. But investors are not that interested, as such rents go up another 10%
Not even close - on the rents or the pricing. Maybe next year is the surprise
9) In the markets tech stocks are the winner. Great year for COIN and the magnificent seven. QQQ is up 30-40%
10/10 - QQQ is in that range. COIN and the other six had a great year
10) There will be a major AI concern or danger, sparking talk of regulation. Deep fakes / fake nudes are a concern but this one is more dangerous
With the talk of AGI etc I think I got this one
11) Expect some tax raises (or pull backs of tax promises) in NZ has we rapidly realise the cupboards are bare. I am guessing excise tax on vaping for one
Not on excise tax but we had various tax raises (App tax / trust rate etc)
12) Towards the end of the year there will be some kind of resolution / settlement in Ukraine - not sure to whose favor
Still not there but I think now early next year
13) Hamas are mostly wiped out and Israel takes control. Many of the hostages (mainly female) are never found.
More or less there.
14) Cost of owning a house goes up dramatic, except interest rates which back down to just below 5% end of year
More or less true - I think interest rates are a bit higher but not far off and falling
15) Gold and silver have a great year
Yep!! 10/10
BTC ETF approved next week. Price skyrockets into the low 50s, then retreats, then back up again once they go live. New ATH towards mid year - but crash going into the end of the year (say into the 30s?)
The BTC ETFs were approved by default as the court found in Aug 2023 that the SEC's denial of Grayscale's application to convert its Bitcoin trust into an ETF was "arbitrary and capricious".
Considering this, you should revise your score down Wolfie.
Down to 92K this morning. Thats a 17% drop in a couple of weeks
Best price to accumulate is when all the BTC maxis have gone quiet and their bravado has dissipated.
Human behavior is more predictable that we're led to believe.
The most hated crypto XRP has outperformed BTC in 2024. It's not something the maxis want to face.
AI begins to deliver. Graduates unable to find jobs that involve sitting (finance, law, IT, secretarial). Frantic move into care-giving jobs which inverts the status of lower level medical careers.
Scarcity value: low birth rates lead us to value children; massive increase in child benefits.
Agree with that but might take longer than a year.
I spent time in Japan in December. I've been going there for 25 years for various reasons. It's amazing to see so many foreigners working in all sorts of service jobs, and also some regular jobs. Everywhere is advertising for workers, often with pictures of happy foreigners, older people, etc. they're not being politically correct, just desperate for staff in an economy with declining and aging population.
I spent time in Japan in December. I've been going there for 25 years for various reasons. It's amazing to see so many foreigners working in all sorts of service jobs, and also some regular job.
Which brings me to a prediction as discussed last week with a Japan-based trader - the number of 'high skilled' migrants to Japan will increase. It might not be a '2025 event', but it is already happening to some extent.
My kids are in school in NZ so I wouldn't move them. But if I was single it would be a possibility.
And when the kids are in uni then spending some time there is definitely an option. There are some really beautiful neighbourhoods there.
Also depending on exchange rates the cost of living seems to be cheaper. Four of us went to Sukiya (chain restaurant) and ate our full for 3200 yen. Less than $40 NZ. It's hard to get out of a burger joint in NZ without forking over $100 now.
Our skilled immigrants serve coffee and work in liquor stores and neatly displace lower class Kiwis into unemployment. I'm guessing Japan's 'high skilled' will be utilising their skills and probably not qualifying for residency and full pensions. But I've never been to Japan so I'm happy to be corrected.
In the past migrants to Japan did usually have to return home. But there are some pathways to residency, via qualifications, skilled job offers, and marriage. Also I think the laws will relax a bit as the labour crunch hits. I imagine the kids of the Nepalese guys working in the 7/11 will probably become dux of their schools and become the doctors and engineers of Japan 2045.
Must work in the tech sector. AI..still way off making a real difference. Off shoring and migration entry for skills and reducing barriers with professional certification in countries has had a greater impact in the last couple of years. Especially in the US. See 26,000 tech jobs gone in the valley in the past 12 months. That's real.. not like Stats NZ estimates in the loss of Wellington public sector workers...
My one prediction is we will have a third year in a row media say one thing and Stats NZ will revise it figures at year end to show us it was the complete opposite...
Going to be a really tough year for the Aotearoa cafe industry. Coffee bean prices have seen a significant increase in 2024, reaching levels not observed in nearly 50 years. The price of Arabica beans, which represent the majority of global coffee production and preferred tastes in Aotearoa, has surged dramatically. Arabica coffee prices rose by over 80% in 2024 and approx 150% since 2019. Even Robusta coffee bean prices are up 200%+ since 2020-21.
As wallets tighten, cafe spend will fall and pressure will come on commercial rents. If landlords don't adapt to the changing mkt conditions, cafes will close and few will be interested to take on the business risk.
I know a guy in the coffee business. He's been saying for a long time that retail prices for good coffee in NZ are too cheap compared to the rest of the world, especially the boutique style single origin beans. The market might bifurcate into more expensive quality coffee, and cheaper options based more around machine coffee and cheaper beans.
He's been saying for a long time that retail prices for good coffee in NZ are too cheap compared to the rest of the world, especially the boutique style single origin beans.
Possibly. But the point is that even the boutique, high-end cafes may suffer.
1. Input prices will not be coming down, even when purchasing in greater volumes. You cannot squeeze the growers. Those days are gone. At least in Asia, growers are already focusing more on high-value crops like durian. Keeping African and South American growers in slavery doesn't seem consistent with morally righteous Aotearoa.
2. Increasing drink prices will not necessarily impact purchase frequency for HNW customers. But I suspect it will for mid-income customers. But that's just my reckon. I can't quantitatively forecast demand, but anecdotally and qualitatively, I think it's already quite dire.
Yes when you’re paying over $6 a coffee and spending over $600 a month on it as a couple something has to change so a year ago we bought a $2k Profitec Machine and a $1k Niche grinder which makes better coffee that 95% of the cafes out there. And we now spend about $70 a month so it’s paid itself off very quickly. I predict many more people will change to dailing in at home.
Yeah, during and after COVID we switched to working from home enough that we now mostly order some good beans from an Auckland roaster and then make a pot of filter coffee each morning. Lasts to mid morning. Or we take it to work in a vacuum flask. Beans are expensive, but much cheaper than buying from cafes. Our dealer is also pushing one of those good machines, which I'll probably get at some stage.
It’s much more cost effective even with the beans pricey like you say. I always imagined it was a bit of a pain in the ass making one at home and not worth the bother but the home machines are so quick now and after a while you get good at it. Worth the initial outlay.
These do me just fine. $0.62 per coffee.
Yeah yeah, it's not fresh coffee and I do like a proper grind too from time to time but it's not life changing.
https://www.woolworths.co.nz/shop/productdetails?stockcode=549624
Hospitality and Construction are always the first to tank in a recession but any business reliant on discretionery disposable income will be affected, low overheads may save some especially if landlords cooperate and accept lower rents instead of no rents, pity councils aren't subject to the same market rules - they could be with binding refernendums but that won't happen as Pollies and bureacrats hate accountability and rresponsibility, perhaps if Trump shows the way NZ may follow - in 20 years!!!
Not predictions, but Sam Stubbs' optimism for 2025. Found this comment a little odd. Opportunities for working as an extra doesn't seen highly ambitious, but Sam has his finger on the pulse.
That leads into the third reason for optimism - the changing shape of our economy. New and large industries are emerging. Data centres are a case in point. And judging by the number of relatives working as extras in big TV and movie productions, that’s also now a significant and resilient industry.
https://www.thepost.co.nz/business/360533722/good-reasons-feel-alive-25
"...that’s also now a significant and resilient industry."
... that all NZdrs are paying a billion dollars more tax to subsidise Sams relatives jobs
https://www.stuff.co.nz/national/politics/300234062/taxpayers-to-fork-o…
Most commentators will purchase subscriptions - they're too addicted not to, they think they have something to say, and the price is cheap.
A bunch of old people will die, and there will be a sell-off of both their houses and their boomer/gen-x children's investment houses as the latter use their inheritances to deleverage. (OK latter may be wishful thinking).
More grandparents will be visiting their grandchildren in Oz.
Since that 10-15 years would be a bonus for me (currently mid-seventies) and I've adult six children I've had time to think about it. It will be a lottery. There will only be inheritance if both I and my wife expire without needing prolonged care - say 50% chance. Or we could employ tax lawyers, transfer money to foreign countries, get involved with trusts, etc. Then an actuary will have me out of here in 7 years but my younger wife has a reasonable chance of living to 90 and when that happens most of our adult children will be retired.
We need to face up to reality: living older, living fitter mentally and physically, taking longer to pop off when we do decline. The first step for the govt is easy, especially easy in a country which helped pioneer national pensions, just link retirement age with life expectancy not date of birth.
While checking this out on Wikipedia - retirement was invented by that progressive, be-kind, left-winger: Otto Von Bismarck. He preferred 70.
And asking Google about NZ: ""New Zealand created a welfare-based government pension plan in 1898, funded out of general tax revenues. These pensions were available to most people over 65 of 'good moral character' who had spent at least 25 years in New Zealand, although they were not initially available to Chinese immigrants."". The anti-Chinese racism is most distasteful but the remainder is fine (an improvement) so long as they let me decide who has "good moral character".
I remember it well.
My one and only mail order adventure from the back of a comics section in the 60's got me the goods (underwhelming) for about 0.63 NZD to the USD 1.00 including postage - about three months delivery time as I recall.
I did have to buy a stamp though, to post my order.
CONF
Are you sure you aren’t somewhat confused:
NZ pound (not dollar) up to DC day 1967 had parity with GB pound and after DC day and during the 1970s approximately 2NZD to 1UK pound. Never did NZD have parity with GBP.
Prior to 1967 NZ pound (not dollar) was approx 2USD; never 1NZD to 2USD. After DC day the best I think the NZD got in the early1970s (1973 oil shock) was approximately 1.3-1.4USD to 1NZD
I wasn’t sure I made predictions but I did quite well.
First predictions for 2025.
• Tesla will tank from its late 2024 highs.
• Trump and Musk will have a major falling out.
• NZ economy will continue to be one of the worst performing - unemployment higher than expected, surplus stays in the never never.
• As others have said interest rates at low 5s/high 4s at best.
• The AI bubble pops / at least people realise LLM won’t scale to high accuracy.
• Some kind of deal in Ukraine. Taiwan continues to simmer but nothing happens in 2025.
• Wish casting here a bit - Winston takes down the coalition of chaos.
2024 recap
Sticky inflation requiring elevated interest rates (edit clarifying I mean NZ here - US inflation rates will continue to fall).
- sort of true until we really got into recession.
And economic recession.
Net migration down to 50k.
- I think it’s down that way right?
Fractures in the coalition as it becomes surplus in 2027 or tax cuts.
- definitely fractures and the surplus has been pushed way out
Cuts to front line public services - particularly health funded below the rate of inflation.
- definitely true
Electric cars and renewable energy go from strength to strength while New Zealand looks backwards.
- true
Oil prices continue to languish as OPEC has lost control of supply.
- true
Stock prices hit new record highs.
- true - go Bidenomics
AI underperforms expectations as the limits of LLMs become apparent.
- most of the way there on this to be completed in 2025
Sadly the Ukraine war drags on with minimal change into 2025.
- yup
India, Mexico, and Vietnam continue to do well as supply chains de-risk from China.
-
Yeah, I didn’t say it would be a good peace deal. I wish trump hadn’t been elected but now he has, he’ll actively/passively force Ukraine to take an unfair deal. Sadly, the reality also is that Ukraine just doesn’t have enough manpower to sustain this war. Maybe if they had Europe and the US fully behind them but Europe has dragged its feet (looking at you Germany) and the US will not be there under Trump.
I would respectfully suggest, Hardly, that you invest the time to listen to a highly respected American historian who aires the Nazi-based background that led to this U$ coup and to try to appreciate that all Russia ever wanted was an extremely reasonable guarantee of national security - especially within the context of the centuries of disastrous attempts made by the West to destroy the Russian civilization - including by Napoleon and Hitler - both of which were made through the same corridor.
Our previous generations paid a heavy toll in defeating Nazism and only prevailed because of the huge sacrifice that Russia paid during WW2. It appears from your comment that you choose to ignore this and instead try to demonize Russia yet again. In doing so you are aiding in the creation of a potentially existential event, not only for Europe at large, but even of our entire species.
It is becoming more and more apparent that the most insightful critiques of the U$ empire almost always come from Americans who love their country the most, but also possess the humility to grasp exactly how it has completely gone off the rails in its lust for global financial and military hegemony.
Meaningful analysis, in general in geopolitics, must come from a place of understanding and appreciation, whilst all the while maintaining the statesmanlike courage to point out potential contradictions and challenges. Oliver Stone is a classic example of one of these people...
https://watchdocumentaries.com/ukraine-on-fire/
Quite frankly, much of this backgound should be trite knowledge for any Kiwi with even a modicum of geopolitical awareness.
IMO opinion, American imperialism and insatiable greed has created a situation which is exponentially more dangerous than the so-called Cuban Missile Crisis, and this remains the case regardless of which branch of the bought and paid for duopoly occupied the White House.
The Trumpster helped in laying the groundwork for these killing fields - it remains to be seen whether he might defuse the situation, or even add yet more fuel to the Ukraine fire.
News-flash - I am about as much of a "Russian troll”, Linklater as the famed US historian, Oliver Stone.
My observations are based on over 30,000 hours of geopolitical/geo-economic research - I have no book to talk, and remain politically non-partisan.
My only quest is to see a more equitable multipolar planet before I depart this world - judging by the widespread inability of the West to even begin to recognise the vast extent of the WEF driven neoliberal agendas, I don’t care for my chances too much.
I would however suggest you watch the doco in the link below.
If you are the slightest bit interested in fact, then here is an entire 1hr 35 minutes of carefully researched EVIDENCE as opposed to simply relying on Western neo-colonial baloney, then I would suggest you put that time aside.
It backgrounds the Nazi infiltration of Ukraine right back to the very early 1930’s and how they have managed to hold parts this region to ransom ever since - it's actually an extremely fascinating watch.
BTW, you may care to list which facts Stone presents that you dispute and on what grounds, as opposed to simply making a completely unsubstantiated accusation of trolling.
WARNING - these are very uncomfortable truths to swallow for anyone who supports the AAZ alliance - the alliance that is quite happy to recruit neo-Nazis and an entire smorgasbord of head-chopping lunatics to help facilitate their forever wars.
If you're listing hollywood hasbeens as go to sources for the #realrussiastory, why not include Steven Seagal?
Instead of being a useful idiot spreading Russian propaganda, why not listen to what the actual Russian motivation is?
Here's "Putins brain", aka Aleksandr Dugin, explaining the imperialist motivations for inflicting the Russkiy Mir onto sovereign neighbours, that have seen the poverty and oppression it offers through history.
Palmtree, you have cherry-picked a tiny clip from Dugin’s narrative to deliberately distort his view on this matter.
I am familiar enough with Dugin’s work to know that he was not talking about building an empire - but of maintaining the integrity of an existing civilisation, which just happens to already be an existing empire - albeit a significant reduction from the much larger USSR.
Besides, he is simply one of society’s intellectual and philosophers who helps to shape Russia’s geopolitical strategy - this is done by consensus - he is simply another independent voice in the overall public discourse. Obviously this revolves around his personal view of the Russian Federation’s survival and its future as a civilization, distinct from both Europe and the west in general.
Dugin has written extensively about Russia's position in the world and its civilizational mission. He believes that Russia is not merely a state, but a unique civilisational entity, with its own unique values and history that must resist the ideological encroachment of the West.
Obviously this has nothing whatsoever to do with empirical ambitions - its about the survival of a very unique culture - actually one that the West owes a huge debt to when it destroyed the warmongering aspirations of both Napoleon and Hitler.
You on the other hand in very child-like attempt, try to obfuscate Dugin's views, in airing a tiny clip that is purposefully devoid of context. Your contrived offering doesn’t pass the sniff test - it's not even low grade propaganda.
My contribution provided a 1 hour 35 minute documentary, painstakingly compiled by a renowned US historian. It has had some 8 years to be critiqued by historians around the world, and is based on irrefutable historical fact.
Whoever wishes to foresee the future must consult the past; for human events ever resemble those of preceding times. This arises from the fact that they are produced by men who ever have been, and ever shall be, animated by the same passions, and thus they necessarily have the same results.
"all Russia ever wanted was an extremely reasonable guarantee of national security".
What utter, absolute rubbish. Russia wants Ukraine's territory, it's as simple as this. No need to make it complicated. Putin has invaded Ukraine and hundreds of thousands of lives have been lost as a result. Full stop.
Yvil and Agnostium - did either of you even bother to listen to the documentary, or did you just critique by assumption in a state of chronic Willful Blindness* - an affliction that 85% of the global population suffers from.
*(We often find ourselves in such a situation because we are hard-wired to see only the things we want to see. And as humans, the only things we want to see are the things that make us feel good about ourselves — things that confirm our biases. If there is anything that has a different effect, our mind will simply choose not to notice it, no matter how obvious it is. It is a condition where we filter what we take in - hence, what we decide to let through and to leave out is essential. We mostly admit the information that makes us feel great about ourselves while conveniently filtering whatever bothers our fragile egos and most vital beliefs)
Have you ever been to Libby, Montana?
Only serious disagreement is you are confusing AI with LLMs. Language models try to handle language like humans so will always be fallible - that's baked into the design however still a remarkable development. For example I asked for a poem about 'toad in the hole' and then a translation into French - even the brainiest in my family would have taken a few days, myself a few years and Claude took a second (other LLMs were as fast but their poems didn't match the imagery of Claude 3.5 - however that may have changed in the last couple of months).
AI's now coach champion Chess and GO players and have done so for years. AlphaFold predicts the 3D structures of proteins. AI has converted essay writing at college into near universal cheating.
AI is revolutionary; compare it to the birth of railways. Stevenson's Rocket was limited compared to the horses it was replacing - the public couldn't just stop when they wanted or change to another destination. The steam boiler could explode and the metal wheels snap. And trains could collide. Limitations but insignificant limitations that were overcome. And now horses are just a hobby.
I’m a big believer in AI, big sceptic on LLMs. I accept your point that LLMs are one approach among many. But I think they represent where the resources are going right now. I expect there will be an AI crash/slump (maybe not next year but definitely by 2026/27) when people realise LLMs are a path to nowhere. Then like many tech trends, AI will go cold for five years or so and then come back with a fundamentally different paradigm that actually works.
The difference between the examples you give and AI is that AI is not scaling effectively in most applications. The increased use of resources is showing diminishing returns. Whereas im sure steam engines showed improving performance and efficiency. The advantage GO/Chess have is they are simulateable systems where two AIs can go at each other without a real world environment. They also offer black and white success criteria. There is no such positive feedback for an essay and you there is no mock opponent to simulate against.
AI really is different. My grandchildren are taking the same 20 years that I took to learn to be adult. Once one AI can do something then cloning that knowledge takes a few milliseconds. Human progress from the perspective of an advanced AI is like us watching trees evolve.
I'm fascinated by AI but despite a modest effort to read about it I don't understand it. In fact the more I study the greater my ignorance expands. What my interest has taught me is I'm learning more about humans than AI. My granddaughter hallucinates when adding numbers just like early versions of LLM. AI tend to give more attention to the beginning and the end of a long conversation and lose track of the middle which is just like myself.
The problem with AI is the extreme amount of energy it requires. Fabricating the chips and building the massive datacenters is energy intensive enough, before you even get to the power needed to run and cool them. AI has huge potential, and therefore access to energy will become even more important than it already is. There will be (and arguably already are) wars fought over this. Both Microsoft and Meta are moving towards nuclear power to solve this problem. There is no "green" solution to it, and nuclear is still only a temporary solution - it is not "free" energy.
Because energy is not an infinite resource, AI is a temporary phenomenon. How beneficial or detrimental it is during that time depends entirely on how we use it. If we squander this opportunity by using it for the purposes of control, profit, war, censorship, manipulation etc then it will be a net negative technological advancement. If we use it to benefit humanity as a whole, then we can achieve great things. Only time will tell which path we decide to go down.
There are a few bold claims to unpick there, but fortunately it doesn't take long. Altman and Zuckerberg (among others) have recently said that energy will be the biggest constraint on AI, both now and into the future. The claim that energy is "functionally unlimited" barely warrants a response.
We can already create human intelligence off 100W - by creating humans. Pretending that we will achieve the same efficiency using silicone (or any other non-biological means) in any meaningful timeframe is fantasy.
Just to be clear, I wasn’t making the bull case for AI with those statements, rather I was pointing out that a major shift in architecture should be able to improve efficiency. But that’s not going to happen next year, it might be 10-20 years away. I think the current crop of AI techniques is a dead end. The market will crash and go into despair and out of that will come a revolutionary new approach.
As for energy - nuclear, solar, wind, batteries - It’s there if we build it.
NZ will set a renewable electricity generation level of around 93%,due to increased generation being commissioned and low demand due to large user shuts and high prices from Distribution and Transmission prices.A number of renewable projects in the fast track lane will not be presented due to inability to reach FID due to lack of takeoff agreements.
2024 Generation will be the lowest since around 2012 as plant closures work into the data.
Brocky has been focusing on more productive endeavours since a full year before Labour were kicked to the curb.
National have trimmed the bloated public sector?
Haven't seen much ideological insanity from them but not much inspiration either.
The greatest medium term risk for New Zealand is Labour getting back in with Greens/Hamas and the Maori/Apartheid party.
If this comes to pass the flights out will be booked solid.
Apartment construction tanking, noting it can be a bit volatile:
https://businessdesk.co.nz/article/economy/almost-a-perfect-storm-auckl…
The apartments have been overdone for rental purposes throughout the NZ cities.
Reality is that the number if them being built will probably decline or remain about the same in 2025.
We have had to find tenants for 3 properties for the new year, and can advise that there is a lot of people currently looking and there are some pretty good ones looking so not hard to tenant good property in good areas.
one was a new purchase and multiple good applications and the other two have been accepted at $60 and $70 increases.
Happy New Year to all!
Zespri Gold sales will stutter in China and ASEAN. Images sent to me this morning of China-grown gold varieties of kiwifruit at shelf prices 40-50% lower than those of Zespri and distributed by one of the more powerful distributors in the region. If they're sour in taste, should be a win for Zespri. If they aren't, watch shoppers and consumers shift to the China fruit.
Won't the difference in seasons help NZ as per cherries to Japan?
Good point. Asian consumers put a high emphasis on seasonality. How this affects behavior with kiwifruit, I don't know. But if price is an important decision variable, you have to think that this is a challenge for Zespri and a barrier / motivation for buyers / consumers.
As for cherries, Japanese are more price sensitive these days. Quality is also an important factor. They won't pay top dollar for sub-standard fruit or products.
Below are my 2024 predictions
1) Massive unemployment. Particularly in construction and retail. Unemployment rate up to 6.7% Q4
The exodus to Australia has eased the burden on employment. Not as bad as predicted but these sectors continue to struggle.
2) Record mortgagee sales
Got this one wrong
3) NZD - USD $.53 @ Dec 24
Still a few days to go. Not bad
4) Brent crude $90 USD
Way off
5) I will have run a sub 20 min 5
21:58. 4 min kilometres are harder than I thought
More speed work. Do 8 x 500s under 2m in a session at least once a week. If 2m is too easy, don't increase the 8, shorten the rest between each (20-30s), or drop 2m lower. The first 2-3 500s should feel comfortable. The last 2-3 should be really tough but stop, pat yourself on the back, and drop the remaining ones if too much ... There's always next session.
800s are probably a bit too long for a 5k - about right for 10k? And 100s are a bit too short (and could result in injury @ 39). Good to know you've improved significantly doing speedwork. The right training schedule helps, eh. My swimming coach was surprised I wasn't lifting weights. I hate gyms. I started. My times dropped real fast.
Tendinitis? It's a pig. My doctor suggested 1/2 aspirin 1h before training. No longer than for 2 weeks. Worked a treat for me. But! Only if it's safe for you. Check before trying. Aspirin can have some nasty side effects. New shoes (heel striker) helped too.
Two points from me;
1) I think most of us, myself included, underestimate the very long lag between the rising interest rates and their effect on the economy. Therefore, sadly, I still see more hurt in the NZ economy (businesses, unemployment, housing etc…) for 2025.
2) I have tried to keep an open mind on Trump's re-election, and I have watched many podcasts from different sources. I just can't see how Trump's tariffs will be anything but disastrous for both the USA and other countries. Trump's isolationist policies will be bad for the entire world but this will not play out by the end of 2025, it will be very apparent by the end of Trump's term, if he makes it to a full term.
Not at all. I'm a realist. If you're not aware of how much control big money has over the policy of both US parties then I'd respectfully suggest you read more about how policy decisions are made in the US. Big money doesn't sweat the small stuff that fills MSM - it focusses only on the big stuff like tax and pork.
We have a engineering based manufacturing business.
Over the last 6 weeks we have been advised of 2 price increases for materials/parts and also increased freight costs.
Aluminuim sheet which our supplier sources from China is also increasing in price as the Chinese government are removing a 15% subsidy.
I think our economy will be basically flat for most of 2025
I was a very long way off with my forecast last year:
The S&P500 index will underperform US inflation + 2%.
It was an amazing year, total returns where 26.9% (YTD.)
Consequently my prediction is now a US market crash in 2025. However I think ordinary people in the US will be somewhat insulated from the impact by the fact we have an increasing proportion of the population outside the workforce.
Ratty and crypto predictions:
- Personally I can't imagine BTC at USD500K in 2025, but I could be wrong. I wouldn't discount the possibility.
- Will there by 50-100x opportunities in 2025? Based on the 4-year cycle assumption, yes. But no idea what they are. Most likely related to memes, AI agents.
- And a little leftfield but 'boomer coins' could surprise for a number of reasons but one being that they have large market caps, trading volume, top of mind awareness, and tradfi appeal for ticket clipping. Anywhere from 2-3x to 20-30x (the multiple will depend on public mania and extent to which BTC pivots to alts).
Not sure I will be able to beat the accuracy of my 2024 prediction (i'll stick it in the reply):
Economy: This is a really tough one because I think there are two potential scenarios. In the first, we get lucky and global prices behave themselves. This should enable us to bump along the bottom with just enough stimulus from the pick-up in housing loans and Govt spending (revised up) to prevent collapse. Seasonally adjusted unemployment will get into the mid 5s and prove sticky and the number of people unemployed will climb from 150,000 now to around 190,000. If global prices do not behave themselves (particularly oil) then all bets are off and I think we will see 2025.Q1 as a brief reprieve before we plunge into the low-demand winter months and send unemployment rates into the 6s or 7s. I think the 'bumping along the bottom' scenario is more likely.
Social: We have just had a year of long-standing kiwis being out-competed by new migrants for jobs. In the cities, the workforce of supermarkets, care homes, construction sites etc has visibly shifted. Unusually, this has happened at the same time as aggregate demand has fallen. This is a toxic recipe for social unrest. I think we will see some real tension here - with pressure on Govt to 'stop letting people in' when kiwis can't get jobs. If one of the parties chooses to make politics with this issue (NZ1st?) things could get pretty bad.
OCR / NZD: We're heading down below 3 by end-2025. Note that we are already seeing bank economists arguiing that the likely currency devaluation as we move below the Fed is just the price we have to pay (to get the housing ponzi fired back up for the banks?) This is nuts of course - we don't have to rely on monetary stimulus (dropping OCR and juicing the housing market). Or, maybe we do given that....
Govt Spending: I predicted the Govt spending and revenue story for 2024 pretty much perfectly and 2025 is going to be just as easy. The Govt have fenced themselves into a corner with their stupid 'low Govt debt / must reach surplus' nonsense. The right thing to do of course would be to use the Govt balance sheet to pay for huge infrastructure upgrades and improvements - things that make (a) doing business here cheaper and easier and (b) reduce the cost of living for kiwis and don't load infra catch-up costs onto rates. Sadly, what we will get instead is protracted negotiations to set-up expensive private finance deals to build loads of roads for boomers to use in the holidays. It will be 2026 before we see any real stimulus from these projects although the planning/design side of construction will get some welcome relief. Meanwhile Govt debt will continue to go *up* by more than expected as it always does when Govt try and cut into a recession.
Housing market: I got this wrong last year - thinking we would see growth around 5%. This was based on the OCR cuts starting in April 2024 (something else I predicted wrong). I think there is enough latent demand in the housing market for the RBNZ forecast (7% growth) to be about right. The volume and avg new mortgage value data is already pointing towards growth.
That's enough for now!
Last year's forecast...
Not sure I will be able to beat the accuracy of my 2023 prediction (will post in reply) but here we go:
OCR: I still think the first OCR cut will be 10 April 2024, with bigger cuts as shocking data continues to pour out (more below). Outside chance of a reduction on 28 Feb 2024.
Economy: Unemployment has cut loose and we are in the job losses > reduced local demand > job losses doom loop in many areas of NZ. The data through Feb and March will be awful and Govt will be forced into higher welfare spending - opening up a bigger gap between forecast revenue and expenditure (accom supplement is already busting out above forecasts).
CPI: ... CPI will come down quickly through 2024 as imported goods are already back to 2019 prices and lower interest rates will reduce business costs (and might stop as many going bust).
Govt Spending: The new Govt are small state ideologues and they will respond to the growing recession by cutting spending - the absolute worse response imaginable. As it becomes clear that the NZ economy is an outlying poor performer, the Govt will have an existential crisis in mid-2024. Their response will be to go hunting for expensive private finance to invest in infrastructure (in ways that avoid the debt going on the Govt books). This will take too long to set up, which is why I think 2024 will be an absolute shocker.
Politics: Govt will rush through major cuts to the public service (billions) in the next 6 months as they try to deliver their budget promises and deliver against the Act / National coalition agreement. Willis basically announced this in the few days before Christmas but the media was asleep. Regardless of whether you celebrate or commiserate the loss of services a, b or c, the cuts will add fuel to the recessionary flames.
Housing market: Minor OCR drops will have a muted effect on house prices, which will continue to bump along at around 5% year-on-year growth. But as the end of the year nears, with mortgage rates back down in the late 4s, investors might push prices back up more than that.
My 2025 forecast (above the 2024 one I included for reference) does include a reference to NZD. I think the bank economists are going to push for devaluation through monetary policy (dropping interest rates below Fed). This is a reckless gamble - it will help our exporters but we haven't run a positive current account balance for 50 years so net impact will be contractionary imho.
To the best of my recollection, the RBNZ makes the occasional reference to various central bank interest rate differentials but I can't recall any specific statement that there is any direct link between the OCR and Fed funds rate. That said, a prolonged period of difference, which we've not had for many years, might be different. From what I've seen of other central bank rates relative to the Fed rate, is the offshore lenders tend to value the local economy much as they would a stock, i.e. forward looking as to risk, stability, growth, etc. etc. i.e. central bank interest rates are just a part of the overall picture. (And just quietly, NZ looks a pretty sad investment at this time. But big money - looking for ultra-safe homes - can have long term investment horizons.)
Just an aside, the RBNZ has both the LVR & now (finally) DTI ratio in its arsenal. Both are IMO set way to loose for 'investors' and this will further their distortionary effects on NZ Inc.'s housing market. I'm hoping the RBNZ grows some cojones and tightens these up as they drop the OCR further. Factor in 'investors' looking to do real investment (i.e. create new stuff, or fund the creation of new stuff) and low rates this time around may look very different to previous times. (I live in hope.)
It's a tough one for RBNZ isn't it? Investor mortgages are already on the march. Presumably if they do grow a pair and tighten up LVR/DTI they will blunt the very monetary stimulus they are seeking? Of course, I would love to see RBNZ come out and say that they have done what they can with monetary policy and the Govt now need to come to the party with new tax policy and an investment plan. But, fat chance of that.
For clarity, I was referring to the hawkish commercial bank economists pushing for currency devaluation (Westpac crew). Maybe others thought I was referring to RBNZ.
Got that it was the banks pushing, but it is the RBNZ that need to be convinced...theoretically the goals do not necessarily align.
The 'link' i was referring to is the alleged rate differential and currency value....a look at that differential during the period 1999 (when NZD slipped under 0.40) and 2008 would suggest not. When things get messy return (retention) of capital is the driver not return on....and now is a very messy time.
But have they 'done what they can'?
Was looking at the maths with some family members this week - with interest deductibility and current interest rates, an investor currently gets double the bang for their buck than an OO.
I think playing with the DTI or LVR metrics simply won't work by itself - sure, maybe each investor owns less, but that would be offset by more people seeking investment properties.
The real change that needs to happen is at the tax level - if the government is going to persist with deductibility, they need to make it fair and allow OO and renters to deduct their interest and rent as well. Oh - but they have a 'progressive' tax rate so that wouldn't be fair? Just points to the need for serious tax reform.
It’s crazy that random person on this site points out that government spending cuts and investment in infrastructure programmes that won’t start for years is a recipe for a recession. And what does the government do? And what happens? Who could have predicted this?
The SEC has admitted to withholding Failure To Deliver (FTD) data for GME in a FOIA response. This must be very bad for the SEC to be hiding it. The SEC will not be protecting retail interests. They'll be protecting the hedgies.
https://chartexchange.com/symbol/nyse-gme/failure-to-deliver/
More of a general prediction than anything specific, but I think the veil will be lifted on a lot of topics during 2025. That means the end of the era of "extend and pretend", acknowledging that risk actually exists in the world, and pricing that risk accordingly.
Interest rates will once again become the risk premium they are supposed to be, and be priced by the market, rather than manipulated as a way to try and influence economic activity. The neutral rate is likely to be a lot higher than what people think.
This will cause a lot of issues, some major, but I see it as mostly positive. It will flush out a lot of bad debt and expose those who have been swimming naked. Overpriced asset classes will be brought back down to earth by being marked to market rather than marked to make-believe, and there will be much more incentive to invest in productive activities. Once the dust settles and the hangover finally wears off, I think we'll be left with something we can build a much better economy upon.
Thing will need to get a lot worse before they get any better, but I am optimistic about the opportunities this will provide. Bring on 2025.
I made two fairly vague predictions last year. In a way they were both right:
by JimboJones | 31st Dec 23, 4:37pm
I’m stuck choosing one of these two outcomes, so I’ll have a bob each way:
1) RBNZ have seriously overcooked it, inflation below target, unemployment, recession - or -
2) Global economy fully recovers, NZ dragged along with it.
I blame the RBNZ almost exclusively for our economy. In order of appearance:
- Should not have cut OCR to 0.25%
- Should not have told the punters to borrow up large as low rates were here to stay
- Should not have given banks cheap money
- Should have taken cheap money from banks sooner
- Should have increased OCR sooner
- Should not have increased OCR so much
- Should have cut OCR sooner
A big list of major cock ups in 4 years!
Your "recycled Don, a 78 year old grifter" is the candidate of choice of the Republican Party, and the candidate of choice by the Democrats was a man with dementia. They only changed to Kamila Harris when it had become very obvious that their candidate of choice clearly had dementia. Harris was a second choice candidate. Donald Trump - the person you describe as a grifter had the majority vote of USA voters.
The person I would call a "grifter" is Meghan Markle.
New money, in a new location will fast track a new town free of the non value added restrictions that have caused house prices to be a multiple dearer than they need to be.
This will pull the rug on some very large landbank/developer players who have only been able to hang in the market due to their size and the belief of them and their funders that they can be last man standing when the market takes of again.
Once it's realized that won't happen and there is no speculative non value added rort anymore, wise players will look for the greater fool, while those who are already the greater fool will go to the wall.
Du Val was only the start.
The raw land component will become alot cheaper.
No one in particular as it's hard to see the depth of their support. Ie in for a penny in for a pound.
There is a large number all playing musical chairs, without realizing that the end result is no chair.
They will all know who they are but don't know exactly where they stand in the domino effect to come.
Wait and watch.
Sunfield is a mirage. It is all located on flood plain and will require something in the order of $100m with of stormwater/wastewater services. Simply put- it won’t happen. Winton share price has done nothing but drop and will drop even further as the market realises their valuations are massively overstated and the majority of the developments don’t stack.
How did I go. 2024 list..
1. Interest rates and OCR will stay more or less where they are. Spec crowd rolling off 5 yr fixes make lots of noise.
based on the ponzi posts...tick.
2. The carnage left by the left is worse than expected. Tax cuts are delayed as a result.
Mess was left. Perhaps tax cuts should have been delayed.
3. China accelerates it launch of alt currency #notUS$
yes.
4. Biden is clearly identified as medically unfit to do the big job.
yes
5. Unemoyment picks up. Middle gets further squeezed by inflation as they can't hold employer's hostage as they last two years.
yes
6. Construction sectors slows big time. Another generation of young tradies flees westward. Just like the GFC.
yes
7. Young Drs and educated mobile people also continue to flee west. If you need hospitalization hope your drs medical skills are better than their english.
yes
8. Cash outflows from major US banks continue. More banks fail in the US. Still no one cares.
not so much. (Edit) Biden bailed a lot of failing banks out so US Tax payers masked this truth wether they wanted to or not.
AI will continue to grow and influence the globe and larger society will seem oblivious to this . National will slide down the polls but it will remain likely to win another election in coalition with others . The OCR and interest rates will trend upward in the the 3rd quarter of 2025 . Roads of significance will experience cost blowouts that result in a tapering back of planned expansion. Tolling will be a hard sell to the public . Serious /petty crime will rise likely due to higher unemployment levels. RE will remain in the doldrums . Commercial RE will experience a marked downturn in demand mid year . Trade deficit will continue to grow. Health will experience more cutbacks . In general the year ahead will be worse than the year just gone . The All Blacks will suffer an embarrassing defeat against South Africa at Eden Park.... a positive attitude and smart moves will make for a profitable year ,crisis creates opportunity.... my 10 cents.
My 2024 predictions from last year...very close
Bitcoin will reach and new alltime high on or just after Jan 9th 2024. (Some profit taking will will stay at the new rate all year)
Only 6 months out
The usual commentators will double down here on entrenched views re crypto
Black swan event mid year (probably a new War to add to existing wars - funded by more money printing to infinity)
NZ will meander along selling meat/milk and tourism with not much else to offer
Auckland inner city beaches will not be safe for swimming all year
Lets see how my prediction goes.
-Residential Property market will continue on a downward trajectory, or at best flatline.
-Definitely more OCR Cuts so probably 2.5-3.0% by the end of 2025.
-The coalition of chaos will bring more of the same as the usual.
-Unemployment will not be steady or fall.
-Younger kiwis will continue to flea this country for better opportunities.
Also can't wait to see the new facelift models of the GR Yaris driving around in public.
2025. Unemployment will grow more than we want, more houses will come onto the market than investors want, the recession will continue for longer than we want, the cost of living will not reverse as much as we would like and more and more New Zealanders will look overseas for a better quality of life. Some will find it and some will be disappointed. I have not even mentioned world events that could cause serious disruption to markets. If only countries like America, Russia, North Korea and Iran had leaders we could rely on for sane decisions. Trump is as bad as you can get in terms of not being there for the people. He is only there to satisfy his very large ego.
Interestingly I just got back from the supermarket and it feels like most the items I buy have gone back down in price. Or maybe I’ve just got used to the new prices.
Roast meat seems particularly cheap - lamb, pork, free range chicken, I even got a huge piece of Aussie rump steak for almost nothing, roasted up beautiful. Veges seem cheap again, tomatos $3 a kilo, lettuce $2, broccoli consistently affordable.
Even beer prices are down, although I think that is usual at Christmas.
The economic situation will worsen as Trump gets into office, both overseas and in NZ. A decent chance of a black swan event that will knock out the economy worldwide. Geopolitical situation increasingly uncertain.
Unemployment will keep climbing beyond economists expectations to approximately 7% at peak.
House prices will soften another 10% and then have a small bounce towards the end of 2025 finishing about 7% down for the year.
Immigration will hit almost net 0 at some point in 2025. In saying so geopolitical issues may bring some NZers home if they escalate.
Economy to begin some form recovery very late 2025 to early 2026.
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