*Watch the full interview in the video player above*

New Zealand’s economy is tracking well but there are some black clouds.

Kiwibank’s new chief economist, Jarrod Kerr, says the biggest risk facing the New Zealand economy is rising trade protectionism.

“Since the GFC, every year we have seen trade protectionist ratchet up.”

Kerr says it’s happening because globally, people’s wages haven’t been increasing quickly enough.

“People are annoyed because they haven’t had the growth they imagined over the past 10 years.”

The other big risk to our economy, according to Kerr, is a further economic slowdown in China – our biggest trading partner.

This is partly because of the direct effect but also the impact it would have on our second biggest trading partner, Australia, he says.

While there are black clouds hanging over our economy, Kerr says it is still tracking along well.

“The best indicator is unemployment …. that’s at 4.4 percent, a nine-year low.”

Kerr says he is concerned about low wage growth which he thinks is partly due to people who are in the workforce but still underemployed.

“There are still a lot of people who would like to work more hours.”

In this interview with Mark Jennings, Kerr also discusses how low global inflation is keeping New Zealand’s inflation at historically low levels, and the need for Kiwis to save more.

Mark Jennings is co-editor of Newsroom.

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