NZ At A Glance
New Zealand is vulnerable to an offshore shock. Trading partner growth is slowing and inflation indicators are weak. In the event of a serious deterioration New Zealand would suffer the consequences. However, the domestic economy looks well positioned and is only being held back by capacity constraints and slowing population growth. Given that the pace of expansion should be sufficient to maintain near-full employment and inflation at target, there will be no pressure on the RBNZ to move its cash rate any time soon. The NZD will suffer if global activity stumbles but remain well supported if not.