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International

  • Business Central
  • Oct 30, 2024
  • 2 min read

Updated: Nov 5, 2024


The International Monetary Fund (IMF) World Economic Outlook Update has predicted the global economy will grow by a respectable 3.2% in 2024 and 3.3% in 2025.

However, geopolitical and trade tensions along with policy uncertainty continue to complicate monetary policy.


In Europe, the war in Ukraine continues to affect economic stability, contributing to soaring energy prices and supply chain disruptions.


The Israeli military operations in Gaza have also complicated the global economic outlook, with its regional neighbours now being drawn into the conflict.


Houthi attacks on commercial shipping in the Red Sea continue to cause disruption in a critical shipping lane. The Suez Canal is a significant trade chokepoint. The alternative Cape of Good Hope route adds 9,000km or 6–14 days’ travel time.


The IMF predicts that China’s growth will slow to 4.6% in 2024, significantly below the rates seen in previous years. The country is grappling with the fallout from a collapsing property market and weakening export demand, along with persistent deflationary pressures.


About 27% of New Zealand’s exports go to China. Reduced demand from China has serious implications for our economy.


The United States goes to the polls during the spring briefings, with the possibility of Donald Trump returning to the Oval Office.


Trump’s promise to impose a 10% tariff on all imports could spark a trade war, particularly with China, which could reverberate through global markets and affect New Zealand’s trade relationships. Trump is threatening a 60% tariff on imports from China which could lead to China looking to aggressively expand into other international markets.


Closer to home, expectations of a rate cut in 2024 in Australia have reduced with the Reserve Bank of Australia (RBA) likely to hold off until February 2025, with inflation still outside the RBA’s target range.


With key trading partners facing their own economic hurdles, adapting to these international shifts is crucial for New Zealand.





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