The New Zealand Institute of Economic Research (NZIER) published its latest forecasts on New Zealand’s economy and the domestic currency, with the key highlights found below.
Activity indicators suggest annual GDP growth could slow to around 2 percent over the coming year.
Annual growth in GDP is now expected to be 2.3 percent for the year to March 2020, before picking up to 2.7 percent in the subsequent year.
Upward revision to the outlook for public consumption through to 2021.
Expectations of weaker growth in household spending, investment and exports over the next two years.
Trade war between the US and China far from resolved, the heightened uncertainty is expected to weigh on export demand.
Employment growth forecasts have been revised slightly higher.
Expectations of the unemployment rate are broadly unchanged from the previous quarter.
The New Zealand dollar (NZD) and interest rate outlook has also been revised lower in the wake of the surprise 50 basis point cut to the Official Cash Rate (OCR) in August.
Despite the forecasts downgrade by NZIER, the Kiwi manages to defend the bids near 0.6380 region amid a massive surge in oil prices. Oil prices rocketed as much as 15% in early trades following weekend reports that the Saudi oil and gas facilities were attacked by Houthi drones.