New Zealand Treasury’s Monthly Economic Data report noted that the 0.5% real GDP growth in Q1 was below the forecast set in the Budget Economic and Fiscal Update (BEFU). Terms of trade fell by -6.7% due to a slight fall in export prices and an increase in import prices, contributing to -0.4% decline in nominal GDP.
Consumption indicators were soft. Business confidence deteriorated further in June, hitting post-election lows. Combined they suggest “there is a little less momentum in the economy and poses some downside risk to our BEFU GDP forecast in the near-term.”
The report also warned that “risks around trade continue to escalate with tariffs affecting a range of trade between the US and China, and a growing number of other countries.”
