The New Zealand economy regained some momentum into the middle of the year following a soft patch at the end of 2016 and in early 2017. Overall the case remains for continued solid growth. The outcome of the election creates the greatest uncertainty, though both major parties remain committed to the foundations of New Zealand’s macro-economic stability. Fiscal policy looks set to be easier in 2018/19 regardless of outcome with the only question being the mix of that easing. Inflationary pressures remain generally subdued with monetary policy likely on hold until late 2018.

Key points:
  • Economy regains momentum
  • Strong pipeline of construction activity
  • Business investment is growing
  • Underlying inflationary pressures low and stable
  • Expect short-term interest rates to remain on hold
  • New Zealand equity market performs strongly

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