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According to analysts at ANZ, New Zealand’s December quarter Balance of Payments and GDP figures are released at 10:45am next Wednesday and Thursday respectively and will be keenly watched by the markets to gauge the insights of the kiwi economy.

Key Quotes

“We expect GDP expanded 0.6% q/q in Q4, which would see annual growth moderate 0.1%pt from Q3 to 2.5%. If GDP comes in as expected, per capita growth is poised for another weak print. However, per capita measures have become more uncertain since the implementation of outcomes-based migration data.”

“Overall, we expect the economy grew moderately in Q4, following a 0.3% q/q lift in Q3. Economic momentum has softened, though domestic demand is being supported by elevated (but likely easing) net migration inflows and heathy household incomes (on the back of the tight labour market, Families Package, low interest rates, and recent retracement in oil prices).”

“Turning to the Balance of Payments, we expect the seasonally adjusted deficit to widen around $0.3bn from Q3. The goods deficit is expected to widen by a little more than $0.2bn as import values lift around 3% q/q and exports fall around 1%. The 3% fall in the Q4 OTI terms of trade suggests prices were a significant driver of the quarterly change.”

“A slight narrowing of the services surplus and widening of the income deficit are expected make up the remaining $0.1bn widening in the current account deficit. On the income side, the deficit is expected to widen as primary income outflows lift on the back of growing international equity liabilities. The annual current account deficit is expected to widen 0.3%pts of GDP to 3.9%, which is more a function of base effects than the quarterly change.”