Page 15 - Taking Stock 22 Summer 2019

Summer 2019 Taking Stock Themes and strategies for 2019 POLITICS A rich menu of political issues will continue to fascinate in 2019. The Mueller inquiry into Russian interference on the 2016 US presidential election will continue to cause problems for President Trump. Furthermore, the 2018 mid-term elections saw the Democrats take the US House of Representatives. A divided congress will make US policy making and government funding more challenging for the remainder of this presidential term. Political challenges remain high in Europe with the leadership transition in Germany, scal tensions in Italy and more general policy-direction tension in France. The Brexit process remains a shambles. A no-deal exit, a new Conservative party leader and Prime Minister, and an early election all remain live possibilities in the UK. NEW ZEALAND Growth in economic activity disappointed in the second half of 2018, but we continue to expect a modest pick-up in growth over the course of 2019, re ecting easier scal policy and rising labour market incomes as wage growth accelerates. Weak business con dence remains a risk to the outlook though we think the negative business-sector mood is overdone. The tight labour market and tightening capacity constraints pose a risk to the RBNZ’s view that monetary condition remain unchanged until 2020, but the Bank will continue to sit on its hands for now. Political challenges remain high in Europe with the leadership transition in Germany, scal tensions in Italy and more general policy-direction tension in France. !BACK TO FEATURES 15