New Zealand's GDP to contract 7.2% in fiscal year 2021 - NZIER

New Zealand's gross domestic product (GDP) is now seen contracting by 7.2% in the fiscal year March 2021, according to the NZ Institute of Economic Research (NZIER). 

Key points

Consensus Forecasts for GDP have been revised up for the year to March 2021, as the New Zealand economy has turned out more resilient than expected.

The economy is likely to expand by 6.7% in the fiscal year of March 2022. 

New Zealand's relative success in containing COVID-19 has supported the demand for the New Zealand dollar. 

With other major central banks also embarking on very loose monetary policy, the NZD remains attractive. 

Inflation to remain in the bottom half of the Reserve Bank’s 1- 3% inflation target band through to 2024. 

The forecast for the unemployment rate has been revised lower through the projection period, but average expectations are for it to remain persistently high at 5.8% in 2023.