ANZ analysts suggest that as a small open economy, New Zealand is at the whim of global forces as recently, the global growth outlook has deteriorated further and trade tensions have escalated dramatically.
“We step through three key channels which New Zealand has been impacted through; trade, financial markets, and uncertainty. So far, tourist numbers are weaker but our exports and commodity prices have been shielded by continued demand for soft commodities and favourable supply factors.”
“The NZD is doing its job and global financial conditions are looking more fragile, but are still a tailwind. But elevated global uncertainty seems to be weighing on domestic firms’ sentiment, investment and employment. Overall, the risks are all looking pretty one sided.”