NZ: Progressing on the path of economic growth - BNZ

New Zealand’s economic expansion is now over six years old and there is no reason to assume it will come to an end any time soon, according to analysts at BNZ.

Key Quotes

“While the expansion from here will be much constrained by capacity bottlenecks, we are still forecasting 2.5% growth for 2017, rising to 3.0% in 2018 before dropping back to 2.6% the year after. The economic expansion will be driven by assumed stimulatory fiscal policy (tax cuts supporting private consumption and significant infrastructure spending); low interest rates (the cash rate staying well below neutral); a record high terms of trade; and migration-driven population growth. Looking out over the next two weeks, the ANZ business survey (31 August) will be last chance for it to make its pre-election thoughts known, while there are also a number of Q2 GDP indicators due – namely the Overseas Trade Indexes, Building Work Put in Place and Wholesale Trade, all of which we expect to be encouraging.”