According to GDPlive data, the GDP for the September quarter was -0.539% and inflation is 2.03%. If Wellington used that data, then the Reserve Bank’s Official Cash Rate could be 3.6% instead of an economy-damaging 4.25%.
Professor Christoph Schumacher and his team at Massey University have developed a world-leading AI tool to determine today’s GDP and inflation, not three months out of date. The data is accurate and posted on their website https://gdplive.net.
We can tell there was no “deep recession”. In September unemployment was 4.8%. In the Global Financial Crisis unemployment reached 6.9%.
It is GDP per capita that has fallen. That was down 1.2% during the September 2024 quarter.
Wellington relying on inaccurate, three-month-old, data, is like using carrier pigeons instead of a telephone.
Officials only trust inventions from overseas. When the Federal Reserve uses Professor Schumacher’s AI technology then Wellington will adopt it.
Perception often becomes reality. The scary headlines claiming a deep recession will have affected everything from business investment to Christmas shopping.
Despite officials using out-of-date data, there will be an economic recovery in 2025.
Prediction is difficult because the future is uncertain. I am surprised that my 11 predictions for 2024 all happened.
I predicted Trump would win the Republican nomination and that his contest with Biden would be decided not by votes or the courts but by health.
I forecasted Labour letting in a quarter of a million extra residents in 2023 would mean roads, schools and hospitals in 2024 would be overwhelmed.
I said the coalition would own the massive infrastructure deficit that cannot be fixed in an election cycle.
I predicted that Finance Minister Nicola Willis’ managerialism would fail. The coalition is spending and borrowing more than Labour.
Willis will not end corporate welfare and middle-class transfers. Her claim that in the future the Budget will balance has no credibility. It is not if, but when, New Zealand’s credit rating is downgraded.
I forecasted that Labour would not hold a review as to why it failed in government. Instead, the party would swallow the myth that if Labour had advocated a wealth tax Labour would have been re-elected.
Instead of developing policy to solve real problems, the opposition will spend its efforts protesting a bill that it knows will not pass.
Our political parties in 2025 will pretend that the tax and spending model is not broken. Ageing demographics are blowing out tax-based health and superannuation budgets.
Labour will not take the opportunity to advance instead of tax-based, savings-based, health and super.
Last year I predicted that the Labour/ Green/ Te Pati Māori coalition with no practical solutions just a promise to “tax the rich” is even odds to win the next election. There is no reason to change this prediction.
When looking at the world in 2025 remember no one predicted that the Syrian regime would collapse in a week.
Authoritarian regimes always look stable until suddenly they are not. Any one of the world’s dictatorships could collapse into anarchy.
China is our biggest trading partner. The Chinese economy is in trouble. There is a purge of senior generals in the People’s Liberation Army. I do not know what it means but what happens in China will affect us.
Germany will elect a new government. The new UK Labour government is clueless but democratic countries do not collapse into anarchy.
America’s checks and balances will restrain President Trump. He is a lame-duck president. The Republican Congress will not be a rubber stamp. Ironically Trump’s handpicked conservative Supreme Court may deliver the biggest check on Trump governing by presidential degree.
There will be external shocks in 2025 from places we cannot predict. I said that neither Gaza nor Ukraine would be solved in 2024. I think exhaustion will end both conflicts.
Climate change will accelerate.
AI is the most radical change in human history.
Whole industries and occupations are obsolete. Linear television is a zombie business.
A Kiwi firm has developed GPS-controlled collars so cows need no fences. The AI monitors the cows’ health to track how much the cow is eating.
AI can solve the GP shortage by us all having our own AI doctor.
Technology exists for every pupil to have individual tutoring from their own avatar tutor.
Only our imagination limits the use of AI.
In 2024 Wellington ignored AI-generated GDP and inflation data.
In 2025 our centralised bureaucracy will again be unable or unwilling to utilise the full potential of AI.
