Members gathered in Auckland at The Law Association’s Chancery suite with accompanying views across the Waitemata harbour on 23 September for a lunchtime briefing from two of Australasia’s most senior banking economists, Luke Yeaman, Chief Economist & Head of Global Economic & Markets Research at the Commonwealth Bank of Australia, and Kim Mundy, Acting Chief Economist at ASB Bank.
Clayton Kimpton, Chief Executive of The Law Association, opened proceedings and welcomed members and given the speakers present in the room, he had a special mention for the organisation’s newly established Banking, Finance & Securities Law Committee.
Yeaman set the scene with an assessment of what he described as a new economic era, shaped by four structural forces: US-China strategic competition, rapid technological change, the global energy transition, and ageing populations. He told members that China’s population is now in absolute decline, a shift he said would accelerate and carry significant global consequences. His broader argument was that these forces are investment-heavy and inflation-prone, and that the era of ultra-low interest rates is over.
On near-term risks, he focused on three. The Strait of Hormuz was his most pressing concern. With global crude stocks tightening, he told those in the room that if the strait remained closed for another five to six weeks, oil prices could reach $150 a barrel or beyond. He put the probability of a US-Iran deal at around 85 percent within that window, while flagging escalation as a live risk. Rising long-term bond yields were his second concern, with the 10-year US rate recently passing 5 percent for the first time since 2007, reflecting what he characterised as growing unease in markets about fiscal discipline across major economies.
On the AI investment cycle, he was more optimistic: he said hyperscale capital expenditure was tracking toward $800 billion in 2026, and he estimated that productivity gains flowing from AI could add close to one percentage point to annual GDP growth over time.
Kim Mundy gave strong insights into the New Zealand landscape and was candid about the headwinds facing the domestic economy. Fuel prices have risen around 30 cents a litre in recent weeks, inflation is running at 4.1 percent, unemployment is at an 11-year high of 5.6 percent, and Auckland house prices remain around 22 percent below their 2021 peak. She pointed to export performance as a relative strength, with dairy and meat sectors benefiting from high commodity prices and a New Zealand dollar at a 13-and-a-half-year low against its Australian counterpart. She noted that tourism arrivals were close to pre-COVID levels, driven in part by Australians for whom New Zealand is an affordable alternative to longer-haul travel.
On the domestic outlook, she was measured. Consumers are pulling back on discretionary spending, wage growth is subdued, and the recovery she expects is real but more gradual than earlier forecasts had indicated. Finally, both speakers took questions from a selection of members at the close.
Chief Executive at The Law Association, Clayton Kimpton said that the organisation’s growing partnership with ASB was about creating meaningful opportunities for members to connect with leading experts and hear directly from people who can provide valuable insight into the issues shaping New Zealand’s business and economic environment.
“Bringing our members together for conversations like this is an important part of how The Law Association can add value beyond traditional legal education by connecting the profession with expertise, ideas and perspectives that help lawyers better understand the world in which they and their clients operate” he added.
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