ANZ Economic Outlook

ANZ's Economic Outlook publications are comprehensive projections for the macro-economy and trends in New Zealand’s financial markets.

October 2016: Just what I needed (PDF 320kB)

Momentum in the economy is strong and the expansion has some legs yet. But late-cycle challenges are emerging. A natural balance sheet constraint will require credit growth to ease up, and this – in association with capacity constraints – is a key reason we expect GDP growth to ease from a strong to solid pace over the coming two years.

July 2016: Rolling with the punches (PDF 336kB)

The economy continues to perform well and we expect more of the same over the years ahead. Challenges in dairying and a high NZD are being outweighed by other sectors. Solid demand will see capacity constraints intensify and domestic inflation pressures gradually lift off lows. Key risks are that a) too much domestic-centric growth, a housing market boom and the associated debt build-up will require a purging process; and b) global wobbles turn into outright weakness.

March 2016: Split personality (PDF 264kB)

The economy has Jekyll and Hyde characteristics. Housing is booming, as are construction and tourism. Yet dairying is in the doldrums and will be for some time. The mix of growth (borrow and spend) is not sustainable and a lower OCR (courtesy of low inflation and global unease) will mean more housing largesse at a time households are already heavily leveraged. Amidst uncertainty, we are forecasting 2½-3% growth over the coming three years.


December 2015: A firmer footing (PDF 308kB)

The economy has reasonable momentum heading into 2016. Risks include the weather, the global scene, low export prices and deteriorating structural metrics, but there are reasons for cautious optimism too. Respectable growth should see the unemployment rate begin to fall again by late 2016 although questions remain over inflation dynamics. While we expect an extended period of OCR stability, low inflation keeps the bias to the downside.

September 2015: Stepping up to the challenge (PDF 300kB)

The economy is soft but far from capitulating. Challenges exist, but key positives remain and our projections are of the “soft-landing” variety, with easier financial conditions and a still-decent economic backbone expected to see growth accelerate later next year. That said, the risk profile is still downwardly skewed. And while the key risks (China and now the weather) are not generally of the home-grown variety, a few more domestic vulnerabilities are creeping in too.

July 2015: Managing some unruly children (PDF 364kB)

The New Zealand economy is facing challenges. We characterise the outlook as having some “unruly children” to manage as opposed to the economy heading off the rails. Headwinds are mounting in the form of dairy stresses, fading incremental impetus from a city rebuild and global ructions. However, natural shock absorbers – a lower OCR and a weaker NZD – in association with solid migration, a still strong construction pipeline and better microeconomic foundations are expected to keep the economy on an even keel, limiting the downside to the business cycle before uplift over 2016.

March 2015: Quietly confident (PDF 428KB)

The New Zealand economy is well into an economic expansion and we are picking solid growth of around 3% per year over the coming years – a leader amongst global peers. There are challenges: Mother Nature, low dairy prices, and a high NZD. Yet these are dominated by support from construction, supportive financial conditions, business investment, net migration and still-elevated terms of trade. The main downside risk stems from offshore.

September 2013: The cup is half full (PDF 588kB)

Economic outlook: The economy is firmly into an economic expansion. Global dairy prices are sky-high, the Canterbury rebuild is gaining pace, and the Auckland housing market is responding predictably to near-record low mortgage rates and housing shortages. Under the bonnet, small microeconomic initiatives are adding lustre to the picture. After years of restraint and cost-cutting, NZ firms and households are raring to go. But risks and vulnerabilities remain. The national balance sheet is still weak and supply-side capacity constrained. That means solid and not stellar growth.

June 2013: Greasing the wheels (PDF 308kB)

Economic outlook: The economic outlook has a reasonably solid look to it, though there is likely to be on-going quarterly volatility and disparate rates of sector performance as significant structural forces continue to collide. We've pencilled in 2.4 percent growth this year and 3 percent the year after. Microeconomic forces will play a key role over the coming years, greasing the economy's wheels. A key judgement we are making is that the current rundown in household saving will prove temporary, necessary to rebuild the economy's resilience.

February 2013: The Compass (PDF 308kB)

Economic outlook: 2013 is shaping up better than the prior three years, though it'll be another year of volatility and disparate sector performance. We've pencilled in 2.5 percent growth this year and 2.7 percent the year after, with impetus being Christchurch-centric, offset by an unfavourable NZD and tighter fiscal policy. We continue to pay homage to the complicated web of structural forces, which turns the recovery into a soup bowl (U) rather than a martini glass (V). A key judgement we are making is that households will continue to show restrained spending behaviour.

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