NZIER forecasts suggest that activity in the New Zealand economy will remain soft in the near term

NZIER is the New Zealand Institute of Economic Research. NZIER Consensus Forecasts are an average of New Zealand economic forecasts compiled from a survey of financial and economic organisations. These are not NZIER forecasts. Link here for more.

Part of the latest set of forecasts is this for the New Zealand dollar:

More broadly, a summary of the highlights of the NZIER Consensus Outlook

• Economic growth:

  • Outlook 2025: Expect slow growth through March 2025, with GDP growth rising to 2.2% next year.
  • Economic activity remains soft in the short term, as indicated by BusinessNZ's PMI, PSI, and NZIER business surveys.
  • Growth is expected to pick up beyond 2025, driven by lower interest rates.

• Household Expenses:

  • Forecasts revised higher due to:
    • Many households are taking out shorter mortgages, expecting lower interest rates.
    • More than half of the mortgages are due for repayment within six months, which could reduce repayments.
    • Income tax cuts are expected to boost discretionary spending.

• Residential investment:

  • The revised outlook is expected to improve as lower interest rates support a recovery in the housing market.

• Export:

  • Export growth after 2025 revised higher:
    • Strengthening commodity prices, especially milk, to support export performance.
    • Global food supply constraints are expected to benefit New Zealand exports.
    • Risks: The potential negative effects of US trade policy could be mitigated by China's economic stimulus package.

• Inflation:

  • The CPI inflation forecast for March 2025 was revised down to 2.1%, within the Reserve Bank of New Zealand's (RBNZ) 1-3% target band.
  • Inflation is expected to remain around the 2% median rate in the coming years.

This article was written by Eamonn Sheridan at www.forexlive.com.

Share on Facebook

Post on X

Follow us

Save