NZ: Further moderation in growth – Westpac

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.”