New Zealand At A Glance
We still think the New Zealand economy can muddle through but it’s getting much more difficult. There is now a very real risk that rising uncertainty coupled with business frustration with rising costs and capacity constraints, results in much weaker growth than we are forecasting. If risk becomes reality then who knows just how low our activist central bank might push interest rates. Below zero is now a distinct possibility. With the RBNZ running out of effective policy options expect the Government to come under increasing pressure to ease fiscal policy and abandon its currently-forecast surplus track.