In the Monthly Economic Indicator report published today, New Zealand Treasury noted that the tracking of March quarter data suggested real GDP growth may fall short of 0.7% as forecast in the Budget Economic and Fiscal Update (BEFU) 2018. Nonetheless, June quarter activity indicators have been “a little more positive”. Subdued wage pressures are likely contributing to low inflation, and the expectation that RBNZ will keep OCR at 1.75% “for some time to come”.
Risks are skewed to the downside as led by international developments. In particular, the Treasury noted slowdown in Japan, Eurozone and UK in Q1. And it warned that political instability in Italy will drag Eurozone growth further. Nonetheless, the outlook for China and the US “remains relatively positive”.
Full report here.
