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New Zealand’s economic expansion has entered a more ‘mature’ phase and while GDP growth is not weak, it has slowed from the strong 3.5-4%yr rates seen in recent years as earlier drivers of demand have cooled, according to analysts at Westpac.

Key Quotes

“We expect a further moderation over the next few years.”

“New RBNZ Governor Orr may face a test of resolve with CPI nudging higher this year, although ultimately a sustained return of inflation to the RBNZ’s 2% target mid-point looks elusive and we expect RBNZ on hold until late 2019.”

“With NZ economic fundamentals stable but subdued, NZ rates and NZD continue to be driven by broad US moves and the resurgent USD has hurt the NZD.”