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The NZIER’s March quarter survey of business opinion signalled that the New Zealand economy is on a steady footing as analysts at Westpac have explained.

”Continuing signs of inflation pressures remain evident and are now showing up more consistently in selling prices. Firms are starting to be more comfortable passing on these costs to consumers.

Today’s report reinforces that the economy is on a solid underlying footing. The absence of international tourists has been a drag on activity over summer, but strong demand for hiring and investment highlights the potential for GDP growth over this year.

The key area to watch remains inflation. With firming activity and continued supply-side pressures, the near-term risks for inflation are to the upside. However, a sustained return to the RBNZ’s 2% target will be some time away, and continued stimulus will be needed.”

Market implications

There has been no impact on NZD although markets are braced for the central bank’s interest rates decision and the technicals are compelling ahead of the event:

NZD/USD bears seeking a discount from weekly resistance