According to analysts at ANZ, despite challenges, the New Zealand economy has shown considerable resilience.
Key Quotes
“The unemployment rate unexpectedly fell to 3.9% in the September quarter and resources in the economy are stretched.”
“A number of factors are expected to continue to support growth, but headwinds remain and GDP is expected to grow between 2 ½-3%- a little below where we see trend. With resources in the economy stretched, conditions are in place for wage and price inflation to increase, but only gradually.”
“We expect the OCR to remain on hold for the foreseeable future and see risks to this view as balanced. If inflation picks up more quickly than expected, then a hike may be required. But if the economy underperforms, then more monetary stimulus may be needed.”
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