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NZIER Consensus Forecasts shows lower growth outlook

Contributor:
Fuseworks Media
Fuseworks Media

The latest NZIER Consensus Forecasts shows another downward revision to the growth outlook, relative to the previous quarter.

This is despite an upward revision to the outlook for public consumption through to 2021, reflecting expectations of increased Government spending in the next two years. This upward revision was offset by downward revisions across other key areas of the New Zealand economy, with expectations of weaker growth in household spending, investment and exports over the next two years. With the trade war between the US and China far from resolved, the heightened uncertainty is expected to weigh on export demand.

Despite the downward revisions to the growth outlook, employment growth forecasts have been revised slightly higher. However, 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. Lower global bond yields are also likely to have led to a reassessment of long-term interest rates.

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