Pending the release of official New Zealand Gross Domestic Product (GDP) data this week, the New Zealand Institute of Economic Research (NZIER) has released its consensus forecasts for the country’s growth and inflation figures.
Main conclusions
Average annual GDP growth is expected to slow to 0.4% until March 2024, before recovering to 1.1% in 2025.
Rising interest rates are starting to dampen demand as the impact of the Reserve Bank’s previous increases in the official cash rate is being transmitted to the wider economy.
To this must be added the downside risks derived from lower demand for New Zealand exports, mainly due to the worse growth prospects in China.
These risks are offset by upside risks from the strong recovery in net migration, which will likely support demand in the coming years.
The inflation outlook for the year ending March 2024 has been revised upwards. Annual CPI inflation is expected to decline to 4.3%, before reducing to 2.4% in 2025.
Source: Fx Street
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