New Zealand Economic Outlook
May 21, 2019The economy seems to have sustained its momentum in the first quarter even though tailwinds to growth have softened. Domestically, lower electronic card transactions and a dip in employment growth point to more moderate household spending. Fixed investment, on the other hand, likely held up, supported by upbeat construction activity as reflected by rising building consent issues in Q1. On the external front, export growth was probably restrained by waning tourist arrivals, which recorded the slowest expansion in six years owing to a fall in Chinese visitors. Turning to Q2, domestic activity looks somewhat brighter: Electronic card transactions accelerated in April, which, coupled with upbeat consumer sentiment, suggest that spending may strengthen ahead. In addition, investment should get a boost going forward after the ruling Labour party rolled back its planned capital gains tax on 17 April, amid growing opposition.
New Zealand Economic GrowthGrowth is projected to soften this year. Despite a tight labor market, subdued wage growth will eat into household spending. In addition, low investment intentions by firms will likely weigh on fixed investment, even as the recent cut to the official cash rate should give it a slight push. Lastly, escalating trade tensions threaten external demand from China, a key trading partner. Met the why particular panelists expect the economy to expand 2.5% in 2019, which is down 0.1 percentage points from last month’s forecast, and again 2.5% in 2020.
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New Zealand Facts
|Bond Yield||1.71||1.20 %||Jun 13|
|Exchange Rate||0.66||-1.69 %||Jun 13|
|Stock Market||4,461||0.11 %||Jun 13|
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New Zealand Economic News
May 31, 2019
The ANZ-Roy Morgan consumer confidence indicator declined to 119.3 in May (April: 123.2), notching a six-month low but remaining well above the 110-point threshold that separates optimism from pessimism among consumers. Consumers were more pessimistic about current conditions in May from a month earlier, reflecting reluctance to buy big-ticket household items as well as a dimer perception of their current financial situation.
May 30, 2019
The ANZ bank business outlook indicator rose by 5.5 points in May, with a net 32.0% firms reporting that they expect general business conditions to deteriorate this year.
May 8, 2019
On 8 May, the Reserve Bank of New Zealand (RBNZ) lowered the official cash rate (OCR) by 25 basis points to an all-time low of 1.50%.
May 1, 2019
The seasonally-adjusted unemployment rate edged down to 4.2%, from Q3’s 4.3%, as had been expected by market analysts.
April 26, 2019
The ANZ-Roy Morgan consumer confidence indicator rose to 123.2 in April, from March’s 121.8.