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We are entering an unprecedented synchronised global slowdown. As this unfolds, the current account is expected to widen over the coming year, though there are a lot of offsetting forces at play, analysts at ANZ Research brief.

Key quotes

“The income deficit will narrow a little with global interest rates now slashed. But this is expected to be overwhelmed by a slump in global trade.”

“The NZD has slid lower and we think further weakness will come, given New Zealand’s export dependence and with the RBNZ expected to conduct quantitative easing in the not-too-distant future.”

“We expect a recovery in exports when global demand picks up and trade resumes. But there is a lot of water to go under the bridge before that happens, with the slowdown likely to be protracted.”